The second edition of the Finance Ministers’ Conclave resolved to submit a memorandum to President Ram Nath Kovind next month seeking certain amendments to the Terms of Reference of the 15th Finance Commission.
They feared that the terms, as they stood today, might impose conditions on States’ power to borrow and curb them altogether besides attempting to fulfil the “Central government’s agenda through fiscal transfers”.
The memorandum is likely to be finalised in the next few days in consultation with the Chief Ministers of all those States feeling aggrieved with the alleged attempts by the Central government to assert itself at the cost of fiscal federalism.
The meeting also decided to chalk out the future course of action on the terms “that the Central government has given to the 15th FC” in New Delhi in June.
Tamil Nadu and Telangana skipped the second meeting too. Mizoram, Meghalaya, Odisha and Sikkim too did not turn up. Karnataka was represented by the Expenditure Secretary.
In his keynote address, Andhra Pradesh Chief Minister N. Chandrababu Naidu said the performing and progressive States should not be penalised on the pretext of extending a helping hand to the underdeveloped States. If the 2011 Census was considered, the representation of the South in Parliament would go down drastically as population was the criterion for delimitation, he said.
Kerala Finance Minister T.M. Thomas Isaac said Tamil Nadu and Telangana subscribed to the cause in private. The incentivisation announced by the Centre would not benefit the progressive States as their share would be less than 2% in taxes. On other hand, more than 90% of devolution of funds would be based on population, he said.
West Bengal Finance Minister Amit Mitra said the terms undermined Articles 284(4) and 275 of the Constitution.
Punjab Finance Minister Manpreet Singh said, “It is embarrassing to ask the Centre for funds. Punjab’s contribution to national development and security had to be taken into consideration.”
Puducherry Chief Minister and Minister for Finance V. Narayanasamy said the States would agree to measurable performance clause if it were applicable to the Union Government too. The Centre was adopting different parameters and approaches to the Union Territories (UTs) and States. For instance, the UTs were treated as States for the implementation of the GST and considered UT for devolution of funds. “I am unable to understand whether UT is man or woman or transgender.” Deputy Chief Minister of Delhi Manish Sisodia said the devolution was meagre to Delhi.
Andhra Pradesh Finance Minister Yanamala Ramakrishnudu hoped that the common memorandum would act as starting point for fresh thinking on the growing reality of States being more than equal partners in development of the country.
