Kerala has decided to lead the way to discuss how tax revenues being generated are being diverted for the development of north Indian states. Kerala's Finance Minister Thomas Isaac has called for a meeting of finance ministers of all southern states on April 10 to discuss the issue.
Isaac said that he had written to all the finance ministers of the southern states. All of them have agreed to be part of the discussion in principal. They are however yet to send their official acceptance letters, he also said.
The issue cropped up after the Central Government had recommended to the 15th Finance Commission of using population data from 2011 census instead of the 1971 census for distribution of central tax revenues.
Isaac said that he is opposed to this and it is not right in the spirit of federalism. It will weaken the federal structure of India and also worsen the Central-State fiscal imbalance.
Isaac's move comes just a few days after Karnataka Chief Minister, Siddaramaiah had tweeted, "We need to resist" to all chief ministers of southern states.
The issue was however raked up first by Andhra Pradesh Chief Minister Chandrababu Naidu. He had said that there is nothing called Centre's or State's money. It is the taxpayers' money. Southern states contribute the maximum tax revenue to the Centre, but they are diverting the money to the development of North, he had also said.