NEW DELHI: A needless controversy is sought to be created that the
terms of reference (ToR) of the
15th Finance Commission are loaded against any particular region of the country, finance minister
Arun Jaitley has said.
"Nothing could be further from truth," he said in an article, specifically rebutting the criticism that by replacing 1971 census with 2011 head count, 15th Finance Commission will penalise the southern states which have done better in controlling population. "There is specific inclusion of another reference, that is, 'efforts and progress made in moving towards replacement rate of popuation growth' in the terms of references" FM wrote in a blog coinciding with a meeting of some of the southern finance ministers protesting against the ToR.
"The ToRs of the 15th FC rightly balance both the 'needs' represented by latest population and "progress towards population control" very well. There is no inherent bias or mandate in the ToRs of the 15th FC which can be construed as discriminatory against the states which made good progress in
population control," the FM said.
Some states like Karnataka and Tamil Nadu have slammed the move to use 2011 population as a benchmark for devolution of taxes to states.
Jaitley said that the share in central taxes is allocated to the states based on recommendations made by the finance commissions (FCs) to help them meet fiscal deficiency in providing a minimum standard of services to their people. This calls for assessing states' 'needs' on rationale and equitable basis. FCs use appropriate criteria to assess true needs of states.
He said, "population proxies very well for the needs of the people in quantitative sense". Another criterion, 'income distance', which captures relative poverty of people in the states very well, 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.
"The 14th FC had no specific mandate for using 2011 census. Yet, 14th FC rightly used the 2011 census population data to capture the demographic changes since 1971 to make realistic assessment of the needs of the states. It allocated 10% weight to 2011 population. The 14th FC had allocated a 42% share in the central taxes to the states more than ever before," the FM said.
"There is specific inclusion of another reference, i.e., 'efforts and progress made in moving towards replacement rate of population growth' in the terms of references of the 15th FC. This ToR recognises the efforts of all the states which have done well in population control," he said.
