Six non-BJP states resolve to thwart central efforts to ‘stifle’ their finances

The conclave of fiscal federalism attended by six non-BJP states at the Andhra Pradesh state secretariat in Amaravati on Monday resolved to put up stiff resistance to the Centre’s alleged attempts to stifle the finances of better-performing states through the 15th Finance Commission.

This was the second conference held by states sharing a common concern over the terms of reference of the 15th Finance Commission, after the first one in Kerala on April 10. Five states – Puducherry, Kerala, West Bengal, Punjab and Delhi – attended the event, besides the host state of Andhra Pradesh.

While chief minister V Narayana Swamy came on the behalf of Puducherry, Delhi sent deputy chief minister Manish Sisodia to the meeting. The other three visiting states were represented by their finance ministers.

In his address at the conclave, Andhra Pradesh chief minister N Chandrababu Naidu expressed concern over the Centre’s efforts to penalise performing states by imposing unnecessary conditions. “The Modi government should respect cooperative federalism,” he said.

Naidu accused the Centre of violating constitutional norms and depriving states of borrowing powers under the fiscal responsibility and budgetary management act. He also said the 15th Finance Commission should not make recommendations on the basis of the 2011 population census.

“We will continue our fight until the Centre mends its ways and respects the powers of the states,” the chief minister said.

Narayana Swamy said the Centre was discriminating against Delhi and Puducherry in terms of fund allocation by stating that they were union territories. At the same time, it was collecting heavy taxes on a par with other states, he added.

“The Centre is not compensating the expenditure incurred by us on welfare programmes. The Goods and Services Tax has turned out to be a burden on union territories,” Narayan Swamy said, adding that the Centre should take any decision on the devolution of funds only after due consultations with states.

Delhi deputy chief minister Manish Sisodia alleged that the Centre has been violating the spirit of the Constitution. It has been trying to take over Delhi’s administration, he said, stressing on the need to protect the interests of states.

Kerala finance minister TM Thomas Issac said the Centre should not allocate funds on the basis of the 2011 population census, and questioned the manner in which it plans to compensate the states.

Punjab finance minister Manpreet Singh, for his part, lamented the slowing industrial development in his state due to sops given to special category states. The Union government was trying to push its own agenda on states, he said, bemoaning how “Punjab gets just 29% devolution of funds” from the Centre.

West Bengal finance minister Amit Mitra alleged that central government was trying to squeeze the states for funds in violation of the basics of federalism. “They have even stopped releasing funds for several national welfare programmes,” he alleged.

Yanamala Ramakrishnudu, the finance minister of Andhra Pradesh, said a draft common memorandum incorporating the common concerns of all the participant states will be submitted to the President Ram Nath Kovind. The document would urge Kovind to help reframe the terms of reference of the 15th Finance Commission, he added.