Pannerselvam-led delegation meets Finance Commission, submits memorandum

A 40-member delegation led by Tamil Nadu Deputy CM and Finance Minister O Pannerselvam met 15th Finance Commission on Thursday. The delegation submitted a memorandum to the Commission and put forward their view points regarding the Terms of Reference (TOR) of the Commission.

NK Singh, the Chairman of 15th Finance Commission, assured the delegation that the fiscal needs of each state will be individually assessed and their special characteristics will be kept in view. Commission's visit to Tamil Nadu was finalized for end of September, said reports.

On April 10, a crucial meeting of the ministers of the southern states was held in Kerala's capital Thiruvananthapuram to discuss the concerns and views on the Terms of Reference (ToR) of the 15th Finance Commission. The meeting was organised by Kerala Finance Minister Thomas Isaac in Thiruvananthapuram after the southern states opposed the latest terms of reference (ToR), which they claim will cut their share in revenues while benefiting the Centre with a bigger slice of the pie.

Kerala finance minister T.M. Thomas Isaac said the changes in the ToR of the 15th Finance Commission, that would adversely affect the southern states, has not become a debate in the country.

The ToR has recommended using the 2011 census to calculate population for allocation of union tax revenue in place of 1971 census, which was used by previous finance commissions. This would adversely affect the southern states, he said. There was uncertainty over the incentives to be given to states, he said.

There were several issues that have to be discussed at the national level. The meeting would be the first step towards that, he said.

Union Finance Minister Arun Jaitley on April 10 said 'FCs use appropriate criteria to assess true needs of the states'.

"FCs use appropriate criteria to assess true needs of States. Population proxies very well for the needs of the people in a quantitative sense. Another criterion, the Income Distance, which captures very well relative poverty of people in the States, is used to assess qualitative needs. These two parameters allocate more resources to the populous and poorer States, which need additional funds for providing education, health and other services to the people, which own resources of these poorer States may otherwise not allow," Jaitley had written in a Facebook post to address the concerns raised by the Southern states.