North vs South India: Modi denies bias in 15th Finance-Commission
PM Narendra Modi has dismissed allegations of bias against southern states in the 15th Finance Commission. Kerala, Karnataka, AP and Puducherry had opposed the 'Terms of Reference' (ToR) regarding change of base year of allocation calculation to the 2011 census, claiming it would deprive them and favor northern states instead. But Modi assured states who have worked on population control would be duly incentivized.
What is the Finance Commission? What is its job?
All states and union territories combined get 42% of the Central tax revenue collected each financial year; the Center gets the remaining 58%. But how this 42% is to be divided among states is determined by the Finance Commission, which decides every five years. The 15th Finance commission was formed in November'17 under the chairmanship of NK Singh.
What was wrong with the 15th Commission's ToRs?
Since its formation, the Commission has been a matter of contention for the southern states. One of the controversial ToRs was that the "Commission shall use the population data of 2011 while making its recommendations." The Commissions have traditionally taken the 1971 census as base, since it is the last before family planning was aggressively taken up.
But how would it harm the southern states?
According to the southern states, there was a steady decline in their population during 1971-2011, in contrast to the northern states. So adopting the 2011 census would mean reduced funds to them, which they called "punishment" for investing in education and health schemes.
TN could lose as much as 70% of 2013 allocation
According to FirstPost, during 1971-2011, TN and Kerala's population grew 56% and 75%, the lowest among states. When the 14th Finance Commission started giving 10% weightage to 2011 census, it translated to a loss of Rs. 6,000cr for TN, compared to the 13th which calculated on the basis of just 1971. If the 15th uses only 2011, it could mean a loss of 70%.
Southern states to be incentivized for population control, assures Modi
Notably, one ToR suggests incentives on "efforts and progress made in moving towards replacement rate of population growth." With this, "a state like TN, which has devoted a lot of effort, energy and resources towards population control would certainly benefit," Modi said. "Let us all work together to build a new India which would make our great freedom fighters proud," he added.
