KERALA

Govt. unhappy with State finance panel report

THIRUVANANTHAPURAM OCT. 10. The State Government appears not inclined to implement the recommendations of the Second State Finance Commission pertaining to devolution of funds to local bodies.

The Finance Minister, K. Sankaranarayanan, gave sufficient hints to this effect when speaking to reporters after his meeting with political party leaders here today. Asked to comment on the Opposition criticism that the State was likely to suffer since it had not cared to implement the recommendations of the Second State Finance Commissions, he said it would be difficult to implement the recommendations in their entirety and some alterations might be necessary.

Earlier, participating in the meeting, the CPI(M) leader, T.M. Thomas Isaac, said the index of decentralisation was likely to prove unfavourable to Kerala because the State Government had not cared to implement the recommendations of the Second Finance Commission. If the State had implemented the recommendations, it could have sought a substantial increase in the Finance Commission award, he added.

The Government came in for criticism from other Opposition leaders as well. The CPI leader, E. Chandrasekharan Nair, and the RSP State secretary, T. J. Chandrachoodan, expressed serious concern about the huge disparity in the non-Plan revenue estimates of the 11th Finance Commission and the State Government and pointed out that this had resulted in the State losing revenue gap grant from the Centre. The Government must take urgent steps to ensure that this did not happen in future, they said.

Mr. Chandrasekharan Nair also took exception to the Centre's practice of converting a major portion of grants received from foreign funding agencies into loans and said the debt burden of States was on the increase on account of this. The State had better remain satisfied with a lower Plan outlay than go in for loans to meet its Plan commitments, he said.

Mr. Chandrachoodan said the Opposition would not approve of the fiscal reform programme that placed heavy emphasis on closure of public sector units, curtailment of benefits being enjoyed by State service employees and recruitment freeze. He also pointed to the steady fall in the State's share of the divisible resources from 4.03 per cent in the Seventh Finance Commission award to 3.57 per cent in the 11th Finance Commission award and said urgent remedial measures were necessary to ensure that the State did not lose out in the race for a fair share of the divisible resources at the national level.