South FMs oppose terms of reference of Finance panel

​Thiruvananthapuram/New Delhi: Finance Ministers and officials from three southern states met in Thiruvananthapuram on Tuesday to discuss the terms of reference of the 15th Finance Commission. 

The three states – Andhra Pradesh, Kerala and Karnataka – and the Union territory of Puducherry strongly opposed the terms of reference for the devolution of funds to states. Tamil Nadu and Telangana did not participate in the meeting.

Inaugurating the conference, Kerala Chief Minister Pinarayi Vijayan said it was “only proper for all of us to appeal to the Union government to reframe the terms of reference”

AP Finance Minister Yanamala Ramakrishnudu said the Central government should immediately withdraw the terms of reference of the 15th Finance Commission and finalise the same anew in consultation with the states.

Most of the terms of reference were retrograde in nature and not good for cooperative federalism, he said, adding that these would seriously impact the autonomy of the states. The population criteria should be on the basis of 1971 census and not 2011, he insisted. The Finance Commission should not be burdened with GST issues as there is a permanent GST Council to look into GST issues, he added.

 “We have to see that more power is given to states. 80% of development will be done by states & only 20% by the Centre,” he said.

Kerala Finance Minister Thomas Isaac said the new method is an “unacceptable level of loss.” He said earlier that Kerala and some South Indian states would be the worst affected as their population growth was just 56% as compared to 150% in certain states in the country. 

A state’s population is a significant factor in determining how the tax revenue is distributed, and southern states, which have controlled their population growth over the decades, fear that the new base year will harm their interests.

Meanwhile, senior Congress leader P Chidambaram on Tuesday said the terms of reference of the 15th Finance Commission were "seriously flawed" and would adversely affect the better-performing states. His remarks came on a day when the Finance Ministers of the southern states were meeting to discuss the concerns and views on the terms of reference of the 15th Finance Commission.