NEW DELHI: The Finance Commission will re-evaluate the revised Terms of Reference (ToR) using the 2011 Census to distribute its pooled tax revenues and will sweeten its offer for southern states as they unite against the new ToR.“The commission is working to make state-specific programmes, which will take into account revenue collection by the state, its population and the projects in progress. We are working on the mechanism that will compensate for the loss in pooled tax calculated as per the 2011 Census,” said a member of the Finance Commission, adding that however, if no resolution is reached, the ToR may be revised.
“The North versus South narrative is not correct. We are trying to hold a dialogue. But if it is not working out, the terms will be revisited,” he said.The decision came after a meeting of the Finance Commission with a delegation of 40 AIADMK MPs, led by Tamil Nadu Deputy Chief Minister and Finance Minister O Panneerselvam in New Delhi on Thursday.The delegation submitted a memorandum to the commission and put forward their viewpoints regarding the ToR.
“They urged the commission to balance the need for fiscal transfers to less developed states, while simultaneously meeting the growing aspirations and expectations of the people of better performing states,” an official statement from the Finance Ministry said.“The fiscal needs of each state will be individually assessed and their special characteristics will be kept in view. A progressive state like Tamil Nadu, which has contributed greatly to India’s prosperity, would certainly receive the commission’s careful consideration,” said N K Singh, Chairman of the 15th Finance Commission.
The commission is slated to visit Tamil Nadu by the end of September.
The 15th Finance Commission had said that it would take into consideration the 2011 Census for distributing pooled tax, in place of the 1971 Census. This clause had sparked protest among the southern states, which felt that they will be big losers if the 2011 Census is taken into consideration for distributing pooled tax revenue.