THIRUVANANTHAPURAM:The conclave of finance ministers from south India, which agreed to prepare a joint memorandum against the terms of reference (ToR) of the 15th Finance
Commission, has decided to hold its next round of meeting in Visakhapatnam by the first week of May after ensuring participation of more states.
The draft memorandum, being prepared, will be put for further discussions during the next round and the final version will be submitted to the President, said finance minister
TM Thomas Isaac.
“The meeting will see the participation of Delhi, West Bengal, Punjab and Orissa, besides Kerala, Andhra Pradesh and Karnataka and Puducherry. We are also trying to bring Tamil Nadu and
Telangana, against the ToR of the commission, which is a grave threat to the federal system,” he said.
Isaac said that the meeting raised serious concerns over the ‘deliberate attempt’ by the Centre to cut states’ allocations. “For the first time in Independent India, conditions are being set for tax sharing, a violation of the Constitution. The increase in states share of tax revenue from 32% to 42% made by the previous commission is being projected as an excessive step. Actually, there will be no increase in states’ allocations thanks to huge cut proposed in grant-in-aid and centrallysponsored schemes (CSS),” he added.
“This is a joint fight by states for their rights. Country-wide campaigns will be initiated after submitting the memorandum. We will pursue legal solutions. This has not yet developed into a political fight,” said
Isaac. The commission is expected to visit Kerala to seek its opinion on ToR towards the end of May.
The conclave also expressed deep concerns over restrictions and ‘unilateral conditions’ on borrowing like the clause to bring down the states’ fiscal deficit below 1.7%. “The meeting condemned the ToR on performance incentive, a move to facilitate a cut on tax share,” Isaac said.
