BHUBANESWAR: Even before the State Government has started preparation of the memorandum to be submitted to the 15th Finance Commission which is likely to visit Odisha later this year, politics has taken over a purely financial matter with the BJD and BJP taking opposite sides. The bone of contention is the terms of the reference (TOR) of the Commission with a mandate to use population figures of 2011 census instead of 1971 census. While the opposition started from the four southern states, the TOR has now become the rallying point for most of the non-BJP states including Odisha against the Centre.
With the general elections scheduled next year, the Finance Commission issue is likely to be another campaign material for BJD. The BJD had strongly criticised the 14th Finance Commission recommendations on the ground that it had either slashed funds or stopped many schemes. As Central neglect is the mainstay of BJD’s propaganda, the TOR issue of 15th Finance Commission is likely to be used by the regional party to target the Centre.
Politics apart, the issue raised by the non-BJP states seems to have some substance. Between 1971 and 2011, Kerala and Tamil Nadu had 56 per cent and 75 per cent growth in population respectively. During the period, Odisha registered population growth of 91.15 per cent which was more than Kerala, Tamil Nadu and Goa. Official sources maintained that if the 15th Finance Commission uses 2011 population data entirely, then allocation for Tamil Nadu and Odisha which have performed better in population control will go down.
The Southern states and Odisha fear that the Commission’s recommendation would be favourable mostly to BJP ruled States like Uttar Pradesh and Bihar, if the Central fund distribution formula would be based on 2011 data. Sources said finance ministers of the four southern states, who met at Thiruvananthapuram on April 10 to voice their objection to the ToR, are planning to convene a meeting in May by inviting more States including Odisha.
The 14th Finance Commission had reduced the weightage to the 1971 Census data from 25 per cent to 17.5 per cent and introduced a weightage of 10 per cent to the 2011 Census data which had affected allocations to southern states and Odisha also. The percentage of share of Tamil Nadu, Karnataka, Kerala and undivided Andhra Pradesh has come down from 24.31 per cent in 10th FC to 17.97 per cent in 14th FC.
Odisha’s share in the divisible pool reduced to 4.64 per cent from 4.77 per cent because of the 14th FC award. Quantitatively, the loss during the award period of 2015-16 and 2019-2020 is a staggering `4,600 crore. Though it is difficult to quantify the loss because of the 15th Finance Commission, it is likely to be double the loss because of the 14th Finance Commission. Though it is said that the Commission would give more weightage to State’s performance on population control, FCs had given more weightage to population and per capita income than performance in the past.
Chief Minister Naveen Patnaik wrote a letter to Prime Minister Narendra Modi raising concerns over the issue and said this may have adverse impact on horizontal devolution as well as vertical devolution for the State. On the other hand, the Union Petroleum Minister Dharmendra Pradhan has said Odisha should not be apprehensive of the performance-oriented parameters set by the 15th FC. States performing better in achieving population stabilization will get more benefits from the FC, he said.