After Jana Sena’s Pawan Kalyan and DMK’s MK Stalin, Siddaramaiah is the latest south leader to oppose the 15th Finance Commission’s Terms of Reference.

Need to resist Ktaka CM urges south to unite against Centres allocation of funds
news Friday, March 23, 2018 - 12:58

Karnataka Chief Minister Siddaramaiah is the latest south Indian leader to voice his opposition to the 15th Finance Commission’s Terms of Reference (ToR). The 15th Finance Commission, a body that determines how tax money collected by the Centre is allocated to the states, has in its ToR recommended that the 2011 Census be used to determine devolution of taxes as against the 1971 Census, which has been used by previous Commissions. With a state’s population being a significant factor to determine how the tax revenue is distributed, states like Karnataka which have controlled their population believe the Centre’s fiscal policy will hurt them.

Taking to Twitter, Siddaramaiah hit out the Centre for changing the base year to the 2011 Census and called for resistance among the southern states.

“Center asks 15th FC to use 2011 census data instead of 1971 census used so far to determine devolution of taxes. This will further affect the interests of the south: we need to resist,” Siddaramaiah said in a tweet.

Siddaramaiah tagged Kerala CM Pinarayi Vijayan, Tamil Nadu CM Edappadi Palaniswami, Andhra Pradesh CM Chandra Babu Naidu, Telangana CM K Chandrashekhar Rao, Maharashtra CM Devendra Fadnavis, Puducherry CM V Narayanwasamy, DMK leader MK Stalin and Congress MP Shashi Tharoor, while sharing a link to a story about the Modi government trying to divide the North and South.

The 1971 census was considered as the base year and used by Terms of Reference of all Finance Commissions since 1976. 1971 was frozen as the base year to ensure that states which had implemented population control measures effectively, were not hurt during the allocation of funds.

If the 15th Finance Commission, which makes recommendations for the years 2020 to 2025, uses the 2011 census as the base year to determine how much money each state gets, southern states like Karnataka, Kerala, Tamil Nadu, Andhra Pradesh and Telangana will get lesser funds.

The Finance Commission has invited suggestions from the public. The Commission’s final recommendations will be sent to the Centre in October 2019.

Siddaramaiah’s opposition comes two days after DMK working President MK Stalin’s strongly worded letter to CMs of non-BJP governed states criticising the Centre’s move regarding distribution of funds to different states.

“I am concerned about certain elements of the Terms of Reference (ToR) for the Fifteenth Finance Commission (XVFC), which will affect the very fabric of equitable and just devolution of central tax revenues to the states,” Stalin’s letter reads.

Stalin also accused the Centre of taking such a counter-productive decision without consulting the states. Stalin also raised concerns about the measurable performance-based incentives for states to effectively control their population.

But this discontent isn’t limited to Karnataka and Tamil Nadu. Andhra Pradesh Chief Minister and TDP President Chandrababu Naidu, whose party left the NDA coalition, has also accused the Centre of diverting funds to northern states.

“There is nothing called Central money or state’s money. It’s the people’s money. The southern states contribute maximum tax revenues to the Centre, but the latter is diverting the money to the development of northern states,” Naidu alleged in the Andhra’s Legislative Council.

In February, Jana Sena leader Pawan Kalyan had also questioned the population-based formula for sharing tax revenues between states.

Taking to Twitter, Pawan Kalyan had stated, “"Is the success of south Indian states going to be used against them by Union of India???”

Also read: Stalin calls Centre’s allocation of funds to states a ‘travesty of justice’, writes to 10 CMs

 

 

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