15th Finance Commission’s terms of reference affect interests of southern states, says Siddaramaiah
They believe that using Census data of 2011 to determine how taxes are allocated to states would affect the interests of southern states.
Karnataka Chief Minister Siddaramaiah on Friday voiced his opposition to the terms of reference of the 15th Finance Commission and asked the southern states to oppose them.
The 15th Finance Commission has recommended that the 2011 Census, and not the 1971 Census, be used to determine how taxes are divided among the states. A state’s population is a significant factor determining how the tax revenue is distributed, and states such as Karnataka that have controlled their population fear the Centre’s fiscal policy will harm their interests.
“This will further affect the interests of the south, we need to resist,” Siddaramaiah tweeted, and tagged the chief ministers of Kerala, Tamil Nadu, Andhra Pradesh, Telangana, Maharashtra, Puducherry, Dravida Munnetra Kazhagam leader MK Stalin and Congress MP Shashi Tharoor. The Congress leader also shared an opinion article on the Narendra Modi government attempting to divide the northern and the southern states.
Kerala Finance Minister Thomas Isaac said he has called a meeting of the finance ministers of the southern states on April 10 to discuss the matter, News 18 reported.
Andhra Pradesh Chief Minister N Chandrababu Naidu has accused the Narendra Modi government of diverting tax revenues collected from the south to fund development projects in northern states. “There is nothing called central money or state money,” he said on March 13. “It is the people’s money. The southern states contribute maximum tax revenues to the Centre, but it is diverting the money to the development of northern states.”
The 14th Finance Commission had introduced 2011 Census population data into the calculation for the first time, giving it 90% weightage. DMK leader Stalin has argued that not only does it pose a “threat to the state governments’ financial autonomy”, it might eventually be used to determine the number of parliamentary seats allocated to states, which is still determined on the basis of the 1971 data.