“Many States may not attend FMs’ meeting”

Planning Board VC blames it on Centre’s arm-twisting tactics

Andhra Pradesh State Planning Board Vice-Chairman C. Kutumba Rao has said that Finance Ministers of many States are unable to attend the conclave scheduled to be organised in Amaravati due to the pressure being mounted by the Central government.

The Finance Ministers of Delhi, West Bengal, Kerala, Punjab, and Karnataka are likely to participate in the conference, whose agenda is to discuss a solution to the “discriminatory nature” of the Terms of Reference (ToR) of the 15th Finance Commission and other aspects of fiscal federalism.

Addressing the media in Hyderabad on Saturday, Mr. Kutumba Rao said the Central government’s “arm-twisting” was a clear indication of its apprehension that the conference could pose a threat to its “discretionary powers” even as the States were entitled to fight for their rights. He insisted that the one-day conference was intended to sort out issues arising out of the arbitrariness of the 15th Finance Commission’s ToR, which many States felt were detrimental to their interests.

Not only the Finance Ministers but also experts in public finance, economics, and related domains were invited to share their experiences.

‘Flawed approach’

Mr. Rao said, taking the 2011 census as the basis for devolution of funds to the States instead of the population statistics of 1971 was flawed.

Besides, the likelihood of the 15th Finance Commission not giving revenue deficit grants at all the States was a matter of serious concern, he added.

Mr. Rao disputed the BJP leaders’ claim that 42% share of the Central pool of taxes was being given to the States. He argued that it did not exceed the last three years’ average of 35.9%.

In fact, the Central government had been violating the Fiscal Responsibility and Budget Management Act, and when the States questioned its fiscal path, it was trying to intimidate them, Mr. Rao added.