Kerala to seek new devolution package

THIRUVANANTHAPURAM OCT. 10. Alarmed by the almost steady fall in the State's share of Central funds over the last several years, the Kerala Government has decided to press the 12th Finance Commission for a fresh devolution package that takes into account the State's achievements in the areas of infrastructure and human resource development and decentralisation of governance.

The State Finance Minister, K. Sankaranarayanan, told a meeting of representatives of political parties here today that the State was opposed to economic backwardness and population being the major criteria for fund devolution. The State, he said, wanted the headway it had made in discharging its Constitutional obligations, and its achievements in the social service and infrastructure sectors should be the major criteria for devolution of funds.

The 11th Finance Commission, he pointed out, had assessed Kerala as one capable of achieving surplus non-Plan revenue during 2000-'05 and bracketed it as a middle-income group State. This had resulted in the State being denied the Revenue Gap Grant. The actual figures had also revealed that from 2000 to 2003, Kerala was left with a whopping non-revenue deficit as against surpluses anticipated by the 11th Finance Commission. The State had informed the 11th Finance Commission that it would complete 2000-'05 period with a non-Plan revenue deficit of Rs. 35,815 crores. However, the Commission took the stand that it would have a surplus of Rs. 7,130.67 crores. The actual figures showed that the situation was quite grim, he said.

Mr. Sankaranarayanan said the State also wanted resources to be devolved to the States from the gross collection rather than the net proceeds as at present. Under the present arrangement, the States were losing heavily because the Centre always deducted the cost of resource mobilisation when deciding the quantum of the divisive pool. There must be a discussion on the percentage share of States from the total resource mobilisation, he added.

The Finance Minister said the State also wanted creation of a Disaster Mitigation Fund and improvements in the existing Calamity Relief Fund (CRF) and Contingency Fund so that States like Kerala also benefited from it. He also opposed devolution of resources to local bodies on the basis of the recommendations of the State Finance Commissions because there was little in common between the recommendations of different State Finance Commissions.

`Terms anti-State'

Participating in the discussion, Opposition leaders expressed the view that the terms of reference of the 12th Finance Commission appeared to have been drawn up with the objective of further curtailing the resources devolved to the States. They also noted with concern the huge disparity in the non-Plan revenue estimates of the 11th Finance Commission and the actual figures and sought steps to ensure that the same did not happen when submitting the State's memorandum to the 12th Finance Commission, which is expected to visit the State in the latter half of December.

The Opposition leaders said they were not able to make a proper presentation on the subject as the meeting had been convened without sufficient notice. They hoped that the Government would realise the seriousness of the issue and try to evolve a consensus on the memorandum to be submitted to the 12th Finance Commission.