Modi Government trying to curtail independent functioning of states:  Finance Minister Thomas Isaac

Thomas Isaac said  that in India, the state governments should avail only three per cent of its total revenue as loan. However, the Modi Government is trying to reduce this to 2.5 per cent.

Published: 25th March 2018 02:12 AM  |   Last Updated: 25th March 2018 02:12 AM   |  A+A-

Finance Minister T M Thomas Isaac interacting with CPI leader Kanam Rajendran during the 23rd CPI Party Congress seminar at the Town Hall in Kochi on Saturday | Albin Mathew

By Express News Service

KOCHI: The Narendra Modi-led BJP government’s prime priority is to cut short the space for independent functioning of the states, Finance Minister Thomas Isaac has said.“The Terms of Reference of the 15th Finance Commission is a clear indication of this. In the federal system of India, the state governments should avail only three per cent of its total revenue as loan. However, the Modi Government is trying to reduce this to 2.5 per cent,” he said while delivering the keynote address at a seminar on ‘Quarter Century of Globalised Economy’ organised as part of the 23rd CPI Party Congress here on Saturday.

“We (Kerala) have reduced our debt to 30 per cent, but the Union Government has asked to further reduce it to 20 per cent. If it happens, the government will face acute shortage of funds for its social security welfare schemes. The NDA Government has made the 15th Finance Commission as a tool for curtailing the independent functioning of the states,” he said.

Isaac said in the wake of this development, Kerala has called for a meeting of the Finance Ministers of the southern states to discuss the Terms of Reference of the 15th Finance Commission, Issac said.“The Andhra Government has informed they would attend the meeting. Tamil Nadu and Karnataka will follow suit. The southern states have a similarity in socio-economic development and are witnessing a decline in their population rate. As per the 1971 census, Kerala recorded a population growth rate of 3.9 per cent and now, it is only 2.8 per cent. The Finance Commission has used the 2011 Census data, instead of 1971 Census data, for making the recommendations. The new Terms of Reference will leave the southern states with a smaller portion of funds due to its shrinking population,” he said.

As per the Fiscal Responsibility and Budget Management Act (FRBMA), there are many restrictions for the state governments. “However, our state is attempting to overcome this Act by implementing various programmes aimed at providing employment opportunities for the educated youths. CPI Secretary Kanam Rajendran, who inaugurated the programme, said the Union Government has been concerned only about protecting the interests of the corporates.

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