Andhra Pradesh Finance Minister Y. Ramakrishnudu on Sunday said the state has convened a meeting of finance ministers of all states on May 7 to discuss what it termed the "adverse effects" of the terms of reference of the 15th Finance Commission.
He told reporters in Guntur that the state government will invite the finance ministers of all 29 states to discuss the impact of the terms of reference and consider a joint action plan.
He said that the states were already under stress on account of demonetisation and the Goods and Services Tax (GST). He alleged that the 15th Finance Commission could be another setback for the states as its terms of reference indicate that the Centre will take away more powers from the states.
In a statement issued in VIjayawada on Saturday, Ramakrishnudu had said that the spirit of federalism was being damaged, despite the Finance Commission being an independent body under the Constitution.
The proposed meeting by Andhra Pradesh's ruling Telugu Desam Party (TDP) is the first attempt to rally the states since it pulled out of the BJP-led central government and the National Democratic Alliance (NDA) over the demand for special category to the state.
The Kerala government on April 10 held a meeting of the finance ministers of the southern states, which demanded amendments to the terms of reference.
The 15th Finance Commission is a body that determines how the tax revenue collected by the Centre is distributed among the states.
Several southern states have voiced their opposition against the ‘unjust’ Terms of Reference (ToR), arguing that it will end up penalising them rather than rewarding them for their achievements.
Prime Minister Narendra Modi rejected the allegations of southern states that the ToR of the Commission were biased against them and said it would benefit states that took population control measures.
The Communist Party of India-Marxist, at its 22nd party congress that concluded in Hyderabad on Sunday, termed the terms of reference "anti-federal".
A resolution passed by the party meet said that the terms or reference were "intended" to reduce the share of the states in the overall tax devolution and "squeeze the fiscal space" available to them.
It also accused the BJP-led Union government of trying to use the 15th Finance Commission to "further centralise financial powers".