FMs to meet today in Amaravati over 15th Finance Commission

Finance ministers from Puducherry, West Bengal, Kerala, Delhi and Punjab will be attending the ‘Conclave of Finance Ministers of States with common ideology on Fiscal Federalism’ on Monday at Amaravati in Andhra Pradesh.

The state’s Yanamala Ramakrishnudu said the FMs would discuss the Terms of Reference (ToR) of the 15th Finance Commission. “The 15th Finance Commission’s Terms of Reference need moderation, or else states will lose fiscal powers. Apart from the controversy about the use of the 2011 population instead of 1971, which may result in smaller shares from the common pool of revenues for some states, the ToR are heavily loaded in favour of the Union government. Unless a balanced view is taken by the XV-FC, these ToR have the potential to convert an already hierarchical union–state fiscal relation into a relation of command and control. Since this is the first finance commission after the abolition of the Planning Commission and start of Niti Aayog, it also needs to take a holistic and balanced view of Union and state resources, including the ones that flow outside the commission-recommended route. We will adopt a resolution against those which will be sent to President of India,” he said.

He said that Andhra Pradesh government came forward to host this meeting in Amaravati as a follow-up to the first meeting in Trivandrum where some states met to discuss the concerns over 15th Finance Commission recommendations.

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Ramakrishnudu questioned if the states have to kneel down before the Centre for funds which they rightfully deserve. “As against the federal spirit, the Centre is suppressing the progressive states that are maintaining fiscal discipline. The Centre is saying it will incentivise the states implementing the central schemes effectively but it is attempting to deprive states of their funds. This will hurt the states’ own welfare schemes,” he added.

“AP alone would lose Rs 8,000 crore per annum because of the recommendation to use 2011 census for devolution of funds. Similarly, Tamil Nadu, Telangana, Kerala, Karnataka, Puducherry, Odisha, Punjab, West Bengal, Sikkim, Meghalaya, Mizoram would suffer badly,” he said.