Issues Related to the 15th Finance Commission

15th Finance commission in New Delhi

Over the Terms of Reference (ToR) of 15th Finance Commission, a slugfest is brewing. This slugfest is brewing among the Northern and Centre states. This week Finance Ministers from Karnataka, Kerala, Andhra Pradesh and the Puducherry union territory established a meeting.

Thomas Issac the Minister of Kerala stated ToR of the 15th Finance Commission as a threat towards the federal system. He stated that this is an attempt for cutting down the tax devolution of the state. He also stated that it is an attempt to impose conditions on the states.

Everyone is expecting that Delhi, West Bengal, Odisha and Punjab will take part in the meeting. The next meeting will take place in Visakhapatnam in the next month. Attempts are going on to bring Tamil Nadu and Telangana for the upcoming conclave, Issac further stated.

Role of the Finance Commission

The role of Finance Commission is to divide the country’s finance. This division will be done among the Centre and the states. The significant factor in determining the tax revenue distribution is an important factor.

Till 13th Finance Commission was in an exclusive use. 14th Finance Commission gave a weight. This weight was of 10% for Census 2011 data. This hurt badly to the states like Tamil Nadu.

Between the year of 1971 to 2011, Tamil Nadu and Kerala had the lowest population growth among other states. Whereas there was a huge population found on Bihar, Uttar Pradesh, Rajasthan and Madhya Pradesh. The combined population was noted to be 50 million higher which the national pace of growth can justify.

Because of this huge difference, the southern states feel something else. They feel that using data from 2011 Census is unfair. This 2011 Census is for the allocation of Central resources.

An assumption of benefits from the 15th Finance Commission

These facts are driving a fear in the southern states. The fear is that the Northern states will get benefits from the 15th Finance Commission. According to these states, these states are receiving punishments. This is due to the checking population growth. rewards were on the northern part. This is due to the poor implementation of programmes related to family control.

Modi and Jaitley rejected the allegations on Thursday given by the southern states. The allegations were that the 15th Finance Commission was a biased one. Moreover, Jaitley supported the ToR of the 15th Finance Commission.

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