Kerala Finance Minister T.M. Thomas Isaac says that the 13th Finance Commission report and the Action Taken Report presented in Parliament on Thursday “violates the federal system of the country and will adversely affect Centre-State relations.”
Addressing journalists , Dr. Isaac said the share of States in taxes came down to 2.3 per cent from 2.6 per cent in the finance panel award. This will incur loss of over Rs.5,000 crore for Kerala in the next five years. This will not help the State to overcome its revenue deficit. He said the Finance Commission, which should have acted as an independent professional body, was used by the Centre to further its interests at the cost of the States. Every State government has its own policies as the States are ruled by different political parties. The Centre should not impose its political interests on the State governments.
He said the States had almost reached a consensus on the proposed Goods and Services Tax (GST), but the Finance Commission award torpedoed it with a recommendation for a reduced share of the GST to the States.
