THIRUVANANTHAPURAM: A one-day conclave of state finance ministers commenced in the Kerala capital, Thiruvananthapuram, on Thursday. The conclave, attended by ministers from five states, aimed to share ideas regarding the 16th Finance Commission and other issues pertaining to fiscal relations between the union and state governments.
Kerala Chief Minister, Pinarayi Vijayan, inaugurated the conclave. In his address, Pinarayi said, The Finance Commissions recommend a prescribed share of net proceeds of the Union collected by the Union to the States. However, Article 270 of the Constitution, which stipulates this, excludes surcharges and cesses collected by the Union from the divisible pool of taxes shareable with the States.
"In the last decade, the surcharges and cesses have shown a rising trend and now comprise around one-fifth of the gross tax revenue of the Union. Its direct consequence is the shrinkage of the divisible pool of taxes. The rise in the share of surcharges and cesses has occurred at a time when the Finance Commissions, from the 14th, have recommended a higher share of the net proceeds of the taxes collected by the Union to be distributed to the States,” Pinarayi remarked.
Kerala had demanded, in its memorandum to the 15th Finance Commission, that the share of taxes to be distributed to the States needs to be raised to 50 per cent of the net proceeds, he added.
The conclave was attended by Bhatti Vikramarka Mallu, Deputy Chief Minister of Telangana; Thangam Thennarasu, Tamil Nadu Finance Minister; Krishna Byre Gowda, Karnataka Revenue Minister; Sardar Harpal Singh Cheema, Finance Minister of Punjab; and Kerala's Opposition Leader, VD Satheesan.