President Ram Nath Kovind.
President Ram Nath Kovind.

Finance Commission: Dissenting states approach President

Ministers from four states and two Union territories seek the President's intervention in changing the Finance Commission's terms of reference they claimed undermined their interests

New Delhi:The rift between the Union government and some of the non-Bharatiya Janata Party states over the 15th Finance Commission’s (FFC) mandate widened on Thursday with ministers from four states and two Union territories seeking the President’s intervention in changing the commission’s terms of reference they claimed undermined their interests.

Manish Sisodia, finance minister (FM) of Delhi; Yanamala Ramakrishnudu, FM of Andhra Pradesh; Thomas Isaac, FM of Kerala; Amit Mitra, FM of West Bengal; Manpreet Singh Badal, FM of Punjab; and V. Narayanasamy, chief minister of Puducherry, met President Ram Nath Kovind on Thursday urging him to change FFC’s mandate, which they said will bring “significant hardship to all states".

A memorandum signed by the ministers, reviewed by Mint, urged the President to facilitate a series of changes to the commission’s mandate. These include using 1971 census data instead of the 2011 census data as proposed in the commission’s mandate and scrapping several considerations listed out in the original terms of reference that were to be kept in mind while deciding how the Union government should share its divisible pool of taxes with the states for five years starting 1 April 2020.

Mint had reported in January that north Indian states such as Bihar and Chhattisgarh with higher rates of population growth may become relative winners compared to their southern and eastern counterparts, with the government asking the commission to use the latest census data of 2011 for allocation of resources.

Last week, the government set up a six-member advisory panel to advise FFC on its terms of reference, but that move clearly has not helped in resolving the differences between the central government and the dissenting states.

The considerations that these states want removed include the progress made in boosting tax and non-tax revenue, direct benefit transfers and digital economy.

Remya Nair also contributed to this story.