The CPI(M) has expressed deep concern over the “anti-federal and anti-democratic” underpinnings of the terms of reference of the 15th Finance Commission, alleging that extraneous elements have been brought into them.
The 22nd party congress here on Friday expressed concern that the terms were intended to reduce the share of the States in the overall tax devolution, squeeze fiscal space available to them, impose unacceptable conditionalities and privilege Centrally sponsored schemes over the State programmes.
“As a result of the proposed change in the population base year from 1971 to 2001, the terms threaten to impair seriously the finances of the State governments that performed well with respect to population control,” CPI(M) Polit Bureau member and former general secretary Prakash Karat said.
Populist policies
Mr. Karat, who briefed presspersons about the resolutions adopted by the 22nd congress, lamented that extraneous steps such as discouraging populist policies were not the business of the finance panel. “It appears an ideologically loaded intervention as far as the terms of reference are concerned,” he said. The congress felt that the terms was aimed at curbing the autonomy and rights of the States and it was an assault on the federal principles.
He wondered why the terms had reference to discouraging populist programmes, pointing out that whether a programme was populist or not was a decision to be made in the political domain and not by the Finance Commission. “The mid-day meal scheme, for instance, launched as welfare measure has become the declared state policy,” he said.
Tax share
The terms suggested a review of the Finance Commission recommendation to raise the share of the States in Central taxes to 42%, and asked if the constitutional provision aimed at providing revenue deficit grants to the States should be continued at all.
Further, there were clear suggestions that the finance panel would enforce the recommendations of the Fiscal Responsibility and Budget Management Act review committee report.
“Any such move will significantly reduce the fiscal deficit and the debt-GDP ratio permitted for the States and will severely curtail the fiscal space available to them,” he said.
