Tamil Nadu chief minister Edappadi K. Palaniswami on Wednesday held a meeting in Chennai with his deputy O. Panneerselvam and five other ministers to discuss the concerns over terms of reference of 15th Finance Commission. Photo: PTI
Tamil Nadu chief minister Edappadi K. Palaniswami on Wednesday held a meeting in Chennai with his deputy O. Panneerselvam and five other ministers to discuss the concerns over terms of reference of 15th Finance Commission. Photo: PTI

Tamil Nadu to demand changes in 15th Finance Commission’s terms

15th Finance Commission's recommendation to use the 2011 census for tax revenue sharing among states would severely affect Tamil Nadu, said the state government

Chennai: Tamil Nadu on Wednesday said it wants the union government to reframe the 15th Finance Commission’s terms of reference (ToR), a day after skipping a meeting of southern finance ministers in Thiruvananthapuram that made the same demand.

In a statement, the state government said it will stand to lose if the census year for calculating revenue distribution is changed from 1971 to 2011—the same concern that was voiced on Tuesday by the conclave hosted by the Kerala government.

“The Finance Commission’s recommendation to use the 2011 census for allocation of union tax revenue instead of 1971 census, would severely affect Tamil Nadu which has made rapid progress in population control in the last 40 years."

Even as the representatives of Kerala, Karnataka, Andhra Pradesh and Puducherry met at Thiruvananthapuram, the Tamil Nadu chief minister Edappadi K. Palaniswami held a meeting in Chennai with his deputy O. Panneerselvam who also holds the finance portfolio and five other ministers to discuss the concerns over ToR.

Tamil Nadu and Telangana did not attend the meeting in Kerala.

Southern states like Kerala, Karnataka, Andhra Pradesh and Tamil Nadu, who have made strides in controlling their population say changing the census year will leave them worse off while northern states who have lagged in comparison will get more central funds on account of their larger population.

The statement released by the Tamil Nadu government also said that Palaniswami had recently written a letter regarding the discrepancies in the ToR to Prime Minister Narendra Modi, Union finance minister Arun Jaitley and chairman of the 15th Finance Commission N. K. Singh.

“The MPs of Tamil Nadu would also meet the officials of the 15th Finance Commission and would press to bring changes to the ToR and the demands would also be raised to the commission when it comes to Tamil Nadu as part of its national survey," the statement said.

The All India Anna Dravida Munnetra Kazhagam (AIADMK) ruled government has remained silent over the past few months, while the other southern states have been demanding immediate modifications to the “un-democratic and biased ToR".

However, Tamil Nadu’s opposition leader M.K. Stalin wrote to chief ministers of non-Bharatiya Janata Party (BJP) ruled states last month seeking their support for the demand to reframe the ToR.

Stating that certain elements of the ToR will affect the “very fabric of equitable and just devolution of central tax revenues to the states," Stalin who had already raised concerns about the ToR in February, added: “It may not be an overstatement to suggest that the fiscal autonomy of many states could be reduced to that of municipalities due to ill-conceived ToR."

He added that the announcement of the ToR without consulting states not only violates the principles of federalism, but biases any likely outcome in favour of certain states at the expense of others.

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