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May 10, 2018

Dr Amit Mitra & fin mins of 6 other States meet to demand amending of ToR of 15th Fin Commission

Dr Amit Mitra & fin mins of 6 other States meet to demand amending of ToR of 15th Fin Commission

To protest the Central Government’s decision of changing the Terms of Reference (ToR) of the 15th Finance Commission, of moving the population base year from 1971 to 2011 for determining the States’ share of allocation of the taxes collected by the Centre, the finance ministers of Bengal, Delhi, Punjab, Puducherry, Andhra Pradesh, Kerala and Karnataka met in Amaravati, the capital of Andhra Pradesh, yesterday.

The change in the population base year would discriminate against the States which have done exemplary work in reducing the burden of population, and the States which met yesterday would be among the most affected. As an example, while the average fertility rate of the country is 2.3, the fertility rate of Bengal is 1.6.

On the other hand, States which have not managed to reduce the burden, like Uttar Pradesh, Haryana, Gujarat, Uttarakhand, Rajasthan and Madhya Pradesh, and which, not so coincidentally, as it turns out, are all ruled by the BJP, would be big gainers.

The new ToR, if implemented, would result in Bengal losing between Rs 22,000 crore and Rs 35,000 crore from 2020-2025 (the period of implementation of the 15th Finance Commission). This will cause huge deprivation to the State. Taking all losing States into account, like Kerala, Odisha, Punjab, Telangana, Karnataka, Andhra Pradesh and a few others, the losses would range from, on a conservative basis, Rs 343 crore to Rs 24,000 crore.

Population is one of the primary criteria for determining the share of each State in the divisive pool. All the States and Union Territories are collectively allocated 42 per cent of the Central taxes collected each financial year. The remaining 58 per cent is for the Centre to use for national purposes.

The States which met in Amaravati yesterday are also preparing a joint memorandam to be presented to the Central Government for demanding the amending of the Terms of Reference to remove any discrimination.

Earlier, Chief Minister Mamata Banerjee had written a letter to the Centre on the same issue, asking for the changing of the new ToR.

In it, she had also written that not just in reducing population, but also on aspects like 100 Days’ Work (MGNREGA scheme), rural road connectivity and e-tendering, as well as some others, Bengal has been a trend-setter. For quite a few of these, the current Central Government too has showered praise and encouragement.

For Bengal, another important issue to be considered is the fact that the Trinamool Congress Government has to repay the huge debt left behind by the Left Front Government. The burden amounted to a total of Rs 2.35 lakh crore till March 31, 2018. For financial year 2018-19, the amount to be repaid is Rs 48,000 crore.


Source: Bartaman