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Kerala FM Thomas Isaac. Photo: Hindustan Times
Kerala FM Thomas Isaac. Photo: Hindustan Times

States may seek legal recourse over terms of reference of Fifteenth Finance Commission

The group of states finance ministers decided to explore the possibilities of legal remedies to some of the clauses of ToR of 15th Finance Commission that are blatantly unconstitutional

New Delhi: A day after submitting a memorandum to the President seeking changes in the terms of reference (ToR) of the Fifteenth Finance Commission (FFC), a group of state finance ministers is now exploring legal remedies.

Kerala finance minister Thomas Isaac appeared to mark an escalation in the battle with the centre when he wrote on microblogging site Twitter that the group of state ministers have agreed to seek legal remedies for some TOR.

“The Group of States Finance Ministers also decided to explore the possibilities of legal remedies to some of the clauses of TOR of 15th F.C. that are blatantly unconstitutional, like the reference to ending revenue deficit grants," tweeted Isaac.

On Thursday, four states and two Union territories sought the President’s intervention for changing the commission’s TOR they claimed undermined their interests.

Isaac, along with finance ministers Manish Sisodia of Delhi, Yanamala Ramakrishnudu (Andhra Pradesh), Amit Mitra (West Bengal), Manpreet Singh Badal (Punjab) and Puducherry chief minister V. Narayanasamy met President Ram Nath Kovind on Thursday arguing that TOR will bring hardship to their states.

They sought the use of 1971 census data instead of the 2011 census data as proposed in FFC’s mandate and the scrapping of several considerations listed out in the original TOR 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.

Some states fear their share from the devolution of central taxes will reduce as they have managed to control their population growth more effectively than others.

As there is considerable disagreement between states, an advisory council has been set up to suggest changes in TOR. A group of economists who met the commission on Thursday suggested it would be realistic to use contemporary population data but weightage should be assigned to population and there should be rewards for population stabilization policy.

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