Puducherry Chief Minister V. Narayanasamy along with Finance Ministers of Andhra Pradesh, Kerala, West Bengal, Punjab and Delhi met with President Ram Nath Kovind on Thursday and submitted a memorandum on Terms of Reference (ToR) of the 15th Finance Commission.
"The Terms of Reference of the 15th Finance Commission raise serious concerns. They are qualitatively different from the Terms of Reference of previous Finance Commissions. Some of the changes infringe on the provisions of the Constitution. Some others are disruptive of well-settled federal fiscal arrangements in India. Yet other changes constitute technical errors. We believe that these changes will restrict the States from fulfilling their Constitutional obligations as listed in the Seventh Schedule. They will also prevent States from working effectively towards independent and distinct goals and aspirations within the overall Constitutional framework. They will thus further weaken cooperative federalism in India," the memorandum stated. The memorandum also listed the amendments which the above-mentioned states have proposed.
On May 9, Andhra Pradesh Finance Minister Yanamala Rama Krishnudu said that the ToR prescribed by the 15th Finance Commission are "discriminatory" against states.
"The discussion over the ToR of the 15th Finance Commission should happen all over the country, as they are discriminatory against states. If they are implemented as it is, progressive states would suffer badly. A conspiracy is being hatched to damage the basic financial structure of such states," he had said on the sidelines of the Collectors' conference in Andhra Pradesh. Taking on Prime Minister Narendra Modi, Ramakrishnudu highlighted that under the leadership of the former, states lost all their privileges.
"Shri Narendra Modi as Chief Minister of Gujarat had demanded 50 percent devolution of funds to states. We all hoped that states would get more powers if he became Prime Minister. But after this happened, states had to lose their rights. It is not acceptable for Prime Minister Modi to have a particular stand as chief minister and act differently after becoming Prime Minister," he had said.
The state finance minister also urged all political parties to respond on the issue, keeping politics aside. Earlier, objections were raised by the finance ministers of multiple states, who alleged that the ToR prescribed would have a detrimental impact on fund allocation.
Rama Krishnudu, at a conclave of finance ministers held in Amaravati on Monday, had stated that the use of population from census 2011 by the 15th Finance Commission with a greater weight for determining the allocation of funds to the States would cause great injustice to the States. He also claimed that this approach would penalise States which have shown declining fertility rates and lower population growth over the past four decades.
Moreover, Punjab Finance Minister Manpreet Singh Badal, while highlighting the impact of Goods and Services Tax (GST)-related changes, opined that the states needed to take care of power subsidies, food security and facilities for their people, adding that the ToR acts as an impediment. Meanwhile, the 15th Finance Commission on May 9 constituted an advisory council to advise and assist them on any issue or subject related to the ToR prescribed by it.