NEW DELHI: Among the many tasks the fifteenth Finance Commission will undertake during its term is defining ‘populism’. The N K Singh-led Commission will undertake this first-of-its-kind exercise to fulfil its terms of reference, which call for recommending incentives for states that have been able to control or eliminate incurring expenditure on populist measures.
“The Commission has been asked to look at monitorable performance criteria on things like progress made on ease of doing business, demography management and whether or not a state is deliberately pursuing a populist policy,” Singh said during a media interaction on Wednesday. “It is now for the Commission to decide what a populist policy is.”
The Commission will also have to undertake several other such ‘firsts’ if it is to deliver on its mandate. These include proposing measurable performance-based incentives for states that have made efforts to expand and deepen the tax net, slowed population growth, promoted ease of doing business and saved money by adopting the Direct Benefit Transfer system.
Singh also addressed concerns that some states have on taking the census of 2011 as the basis for population data instead of 1971 census in calculating fund devolution. The previous fourteenth Finance Commission had recommended that states should get 42 per cent of the tax revenues collected by the Centre. But, states like Tamil Nadu, which have seen lower population growth than others, are likely to get lower devolution if calculations are based on the 2011 census.
Singh, however, reasoned that the terms of reference of the 15th Finance Commission provide for incentives to states that have seen controlled population growth and that this balances out the concerns. He also stated that the panel would hold wide-ranging consultations with all stakeholders and tour all the states beginning with Arunachal Pradesh in April, followed by a trip to Jammu & Kashmir and Kerala. It intends to complete the consultations with the states within 2018.