Chief Minister Chandrababu Naidu said on Monday the Union government must respect the cooperative federalism and not penalise States with unilateral and undemocratic Terms of Reference (ToR) to the 15th Finance Commission (15FC).
He was addressing the second round meeting of the Finance Ministers at Amaravati.
Underdeveloped States need a helping hand but not at the cost of progressive States. But the terms that the 2011 population census should be considered while evolving a formula for devolution of funds would lead to heartburn, he cautioned.
Recalling that the Telugu Desam Party’s fight on the State-Centre relations resulted in the constitution of the Sarkaria Commission, Mr. Naidu said the 1971 census was taken as basis for devolution of funds following Andhra Pradesh’s suggestion to then Prime Minister Atal Behari Vajpayee. The number of the Lok Sabha seats in the combined State remained 42 though the delimitation exercise was taken up twice basing on the 1971 census. Now, if the 2011 census were considered, the representation of the South in Parliament would go down drastically as population would be criterion for delimitation, he felt.
Finance Minister Yanamala Ramakrishnudu said in the absence of adequate financial resources with the States, poverty alleviation measures and efforts would take a beating. The present terms indicated a move towards Central discretion in the release of funds. What the States wanted was the opposite. “We want a financial regime in which there is a decisive move away from the discretionary to the assured devolutions,” he said.
The underlying objective of the Finance Commission was to maintain balance of resources in view of the responsibilities of the Centre and the States. But the centralising tendency was evident from the terms. The Centre’s idea was to squeeze the financial autonomy of States, he felt.
Slowdown
The Indian economy was witnessing a slowdown, which the Commission must keep in view. The public expenditure assumed greater importance in the event of slow down. It would lead to upward trend in fiscal deficits.
Further, the inter-governmental transfer system had become complex with different sharing arrangements for different taxes, tax buoyancies had been affected by the transition to the GST, he pointed out.
