NEW DELHI: The Finance Commission will re-evaluate using the 2011 Census to distribute its pooled tax revenues and will sweeten its offer for southern states as they unite against the revised terms of reference.
“The commission is working out to make state-specific programmes, which will take into account revenue collection by the state, its population and the project 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.
However, the member added that if no resolution is reached, the Terms of Reference (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,” said a member.
This came after the meeting of Finance Commission with a delegation of 40 AIADMK MPs, led by Tamil Nadu Deputy Chief Minister and Finance Minister O Panneerselvam.
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 people of the 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 will 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 1971 Census. This clause sparked protest among the southern states, which felt that they will be big losers if 2011 Census is taken into consideration for distributing pooled tax revenue.