VIJAYAWADA: All arrangements are in place for the Conclave of Finance Ministers of States with common ideology on Fiscal Federalism’ to be held in Amaravati on May 7.
Finance Ministers from Puducherry, Delhi (UTs), West Bengal, Kerala, and Punjab are attending the conference. The objective of the meeting is to discuss the impact of the Terms of References (TORs) of the 15th Finance Commission on the states and come out with a solution to safeguard the interests of the States.
In a press release issued on Saturday, State Planning Board vice-chairman C Kutumba Rao said the Finance Commission is a constitutional body, an independent arbiter of resources between the Union and the States. The core mandate of the commission is to divide Union taxes in a way that enables the Union and the States to perform their respective expenditure responsibilities defined in the 7th Schedule of the Constitution of India
He said the 15th Finance Commission TOR need moderation, else states will lose fiscal powers. Apart from the controversy about the use of the 2011 population instead of 1971, which may result in smaller shares from the common pool of revenues for some states, the TOR are heavily loaded in favour of the union government, he said.
“Unless a balanced view is taken by the 15th Finance Commission these ToR have the potential to convert an already hierarchical Union–State fiscal relation into a relation of command and control. Since this is the first finance commission after the abolition of the Planning Commission, it also needs to take a holistic and balanced view of Union and State resources, including the ones that flow outside the commission-recommended route,” he said.