Southern states cries bias, FM calls it needless row

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NEW DELHI: It seeks to create unnecessary controversy so that the terms of reference (ToR) of the 15th Finance Commission are charged against any particular region of the country, said Finance Minister Arun Jaitley.

“Nothing could be further from the truth,” he said in an article, specifically refuting criticism that by replacing the 1971 census with the 2011 count, the 15th Finance Commission will penalize the southern states that have had the best results. in the control of the population. “There is a specific inclusion of another reference, that is, ‘efforts and progress to move towards the replacement rate of population growth’ in the terms of reference,” FM wrote in a blog coinciding with a meeting of some finance ministers. from the south in protest against the ToR.

“The ToR of the 15th FC correctly balances the ‘needs’ represented by the last population and the” progress towards population control. “There is no bias or mandate inherent in the FC 15 TOR that can be interpreted as discriminatory against the states that made good progress in controlling the population, “said the FM.

Some states such as Karnataka and Tamil Nadu have criticized the movement to use the 2011 population as a point of reference for tax refunds to states.

Jaitley said that the share of central taxes is allocated to the states based on the recommendations made by the financial commissions (FC) to help them meet the fiscal deficiency by providing a minimum level of services to their employees. This requires assessing the “needs” of the states on a rational and equitable basis. FCs use the appropriate criteria to assess the true needs of states.

He said, “the population represents very well for the needs of people in a quantitative sense”. Another criterion, the “distance of income”, which captures very well the relative poverty of people in the states, is used to evaluate the qualitative needs. These two parameters allocate more resources to populous and poorer states, which need additional funds to provide education, health and other services to people, which the resources of these poorer states may not allow.

“The 14th FC did not have a specific mandate to use the 2011 census. However, the 14th FC correctly used population data from the 2011 census to capture the demographic changes since 1971 to make a realistic assessment of the needs of the states. It assigned a 10% weight to the population of 2011. The 14th FC had assigned a 42% share in central taxes to the states more than ever before, “said the FM.

“There is a specific inclusion of another reference, that is, ‘efforts and progress made to move towards the replacement rate of population growth’ in the terms of reference of the 15th FC.These ToR recognize the efforts of all the states that have been successful in the control population, “he said.