A day after Finance Ministers of six States had submitted a memorandum to President Ram Nath Kovind demanding 13 amendments in the Terms of Reference (TOR) of the 15th Finance Commission Vice-President Venkaiah Naidu on Friday met the Chairman and members of the commission seeking a clarification on the North-South debate the commission has generated.
The Chairman of the 15th Finance Commission N.K. Singh and members, according to sources, told Mr. Naidu that no State would have substantial losses or equally substantial gains. They stressed that the North-South divide that was being raised was completely unfounded.
The meeting was attended by members of the Commission Shaktikanta Das, Dr. Ramesh Chandra and Arvind Mehta. Mr. Naidu called the meeting in the capacity of Chairman of the Council of States.
Corrective steps
Mr. Das who retired as Economic Affairs Secretary said the 14th Finance Commission had taken a liberal view of the grants-in-aid to the States without placing any riders. The present commission sets to correct it by bringing in an elaborate mechanism.
The commission stressed that the terms of reference were drafted according to the present context and the current fiscal challenges.
Mr. Singh defended the use of population data of 2011 census, which States like Kerala, Andhra Pradesh and West Bengal have been aggressively protesting against. He told the Vice-President that his predecessors in 14th Finance Commission was asked to go by 1971 population census but they also took into consideration the 2011 census and rewarded the States who did well in population control.
States like Andhra Pradesh have stated that they wouldl lose out more than ₹24,000 crore per annum if the 2011 population data was used. Tamil Nadu would lose a little over ₹22,000 crore and Kerala & West Bengal will lose ₹ 20,000 crore each per annum.
Mr. Singh also explained that the TOR was only a broad guidance and the Commission was at liberty in finalising the specific criteria and weightages for each of the parameters, after discussions with the States.
The Commission was to submit its report on determining the transfer of revenues and allocation of Grants-in-Aid of revenues of the States by April 1,2019. The recommendations of the Commission would be applicable for the period 2021-22 to 2022-27.
