Vol. XLII No. 15 April 15, 2018

Southern Ministers' Meet Demands Change in Finance Commission's Terms of Reference

NS Sajith

AN unusual gathering of finance ministers from   South Indian states demanded the centre to change the terms of reference of the 15th finance commission which is expected to lessen the powers of the states. The meeting held on April 10, at Thiruvananthapuram, the capital city of Kerala has decided to prepare a memorandum on this regard. The five ministers will again meet at Vishakhapatnam in Andhra Pradesh to finalise the draft of the memorandum and invitation will be sent to finance ministers of other states too. Yanamala Ramakrishnudu offered to host this meeting at Vizag in his state and this meeting which is expected to be held in the first week of next month would discuss on the possibilities to submit a memorandum to the president of India. Legal possibilities to challenge the centre’s move to diminish the powers of the states will also be explored, Thomas Isaac, finance minister of Kerala informed in a press conference.

The meeting decided to strongly oppose the imbalance in the distribution of finance commission awards. Centre should not impose condition on states’ rights to obtain loans. Centre must fix grants while states take up centre’s schemes. Incentives in place of grants are not acceptable. Centre’s proposal to allot states share on the basis 2011 census will be withdrawn. The basic criterion for this should be 1971 Census.

Gulati Institute of Finance and Taxation is assigned to prepare a draft of memorandum on the basis of matters of common interest of the participants of the meeting. The meeting was inaugurated by Pinarayi Vijayan, chief minister of Kerala. T M Thomas Isaac presided over. Puducherry chief minister and finance minister V Narayana Swami, Andhra Pradesh finance minister Yanamala Ramakrishnudu, Karnataka Minister Krishna Baire Gouda, Kerala’s opposition leader  Ramesh Chennithala have attended the meeting.

Yanamala Ramakrishnudu said that it is essential to have a struggle with the centre to protect the states’ rights. Centre should accept the opinion of the states. It must withdraw its unilateral decisions on the 15th finance commission’s terms of reference. The right to decide on this should be entrusted upon finance commission itself.  

The concerns regarding the terms of reference should not be seen through a political angle. Protection of the states’ rights is important. These terms of reference will cause huge loss to almost all states. This is anti-constitutional. The effected states should stand united, he said.