Fi­nance panel not to pe­nalise states over funds’ de­vo­lu­tion

Financial Chronicle - - PLAN, POLICY - FC BUREAU

THE 15th fi­nance com­mis­sion on Thurs­day said there was no in­ten­tion to pe­nalise, in terms of de­vo­lu­tion of funds, states that achieved bet­ter per­for­mance. Fi­nance com­mis­sion chair­man NK Singh said the com­mis­sion would have to give fur­ther thought to use of pop­u­la­tion cri­te­ria for cen­tral de­vo­lu­tion, but main­tained that it would tech­ni­cally not con­sider us­ing a mix of cen­sus fig­ures.

“I can see the ap­pre­hen­sions the states have on use of pop­u­la­tion cri­te­ria. We have been asked to use the later cen­sus fig­ures,” he said.

The ear­lier FC had been asked to use the ear­lier cen­sus fig­ures and they were obliged to do so, Singh said. “How­ever, in their (14th fi­nance com­mis­sion) rec­om­men­da­tions, two things hap­pened. First, they chose a mix of the cen­sus fig­ures of 2011 and 1971. If you are go­ing to sug- gest to us if we would con­sid- er us­ing a mix, tech­ni­cally per­haps not. I am not rul­ing that out but the fact re­mains that we have been asked to use fig­ures of the lat­est cen­sus. If we were asked to use, or left it to us of what to use, that’s a dif­fer­ent mat­ter, he told chief min­is­ter N Chan­drababu Naidu.”

“I can see the ap­pre­hen­sions the states have not only on this is­sue. Is gover­nance about per­pet­u­a­tion of poverty or bring­ing about pros­per­ity? There is no doubt, it is about bring­ing pros­per­ity. But, there again, it has noth­ing to do with the FC that we have been asked to use the later cen­sus fig­ures,” he ob­served.

“That’s an area in which the com­mis­sion has to give fur­ther thought,” he added.

Also, he said, the com­mis­sion has not been asked to as­sign any fixed weigh­tage to pop­u­la­tion in gen­eral. “Af­ter all, the gov­ern­ment ex­ists for the peo­ple. The money which we have to as­sign be­longs to the peo­ple of In­dia and that money is meant for im­prov­ing the life qual­ity of the peo­ple and the op­por­tu­ni­ties. That is a fun­da­men­tal is­sue,” Singh said.

He said it was not the FCs in­ten­tion to pe­nalise states which have achieved bet­ter per­for­mance. “There is an­other as­pect in the terms of ref­er­ence (ToR) which has not formed part of the main de­vo­lu­tion cri­te­ria, but when it comes to per­form­ing and rewarding states, states which have achieved de­mo­graphic man­age­ment in one as­pect, which the ToR has asked us to use. There­fore, the FC is quite at li­bis­sueerty to use that and to be able to use that in a man­ner where this shall not re­sult in this kind of an out­come,” Singh said. On the is­sue of con­tin­u­a­tion of rev­enue deficit grants, he said the con­sul­ta­tion process with state gov­ern­ments was still con­tin­u­ing.

Com­mis­sion mem­bers Shakti Kant Das, Anup Singh, Ashok Lahiri, Ramesh Chand, AP fi­nance min­is­ter Yana­mala Ra­makr­ish­nudu, chief sec­re­tary Anil Chan­dra Punetha, fi­nance sec­re­taries M Ravichan­dra, Peeyush Ku­mar and other top of­fi­cials were part of the de­lib­er­a­tions.

The com­mis­sion mem­bers also in­ter­acted with lead­ers of var­i­ous po­lit­i­cal par­ties to elicit their views on the de­vo­lu­tion of funds.

The com­mis­sion mem­bers also in­ter­acted with lead­ers of po­lit­i­cal par­ties to elicit views on the is­sue

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