Officials from Puducherry, Andhra Pradesh and Karnataka will meet today and try to find solutions to concerns over the 15th Finance Commission’s Terms of Reference. While officials from Tamil Nadu and Telangana are expected to miss the meeting, its objective is to highlight the concerns and “make it a national agenda for debate”. Pinarayi Vijayan, the Chief Minister of Kerala is expected to inaugurate the meeting which will be held in his home state.
TM Thomas Isaac, the Finance Minister of Kerala, stated that the new formula could have a negative effect on the southern states and is yet to be addressed. He added that the country’s federal co-operative structure will not be allowed to be destroyed.
The new formula, which is based on population, so far as tax sharing between states and the Centre is concerned, has attracted criticism from a number of states in the South of India. Population has been recognised as a crucial criteria for tax distribution by the 15th Finance Commission which was formed in November last year. The Commission also said that information from the 2011 census will be used, although it has suggested to use data for the 5-year period starting from 2020.
However, states from the South have voiced their concerns, saying that the suggestions should be based on the data from the 1971 census. The main reason for this was that in comparison with states from the North of India, states in the South had shown great progress so far as population control was concerned as well in the population growth’s replacement rate.