Replacement level fertility rate refers to the total fertility rate that will result in a stable population without increasing or decreasing it.
Mint reported on Tuesday that North Indian states like Bihar and Chhattisgarh, with higher rates of population growth, may emerge relative winners compared to their southern and eastern counterparts under the FFC, with the government asking the Commission to use the Census data of 2011 for allocation of resources, against the 1971 Census data used earlier.
Kerala finance minister Thomas Isaac, in pre-budget demands submitted to finance minister Arun Jaitley on Thursday, said that using 2011 Census data without qualification would penalize states like Kerala that have achieved RRPG and favour those states that continue to report significantly higher rates of population growth.
“Hence it is requested that the population data for 1971 should be taken for making recommendations by the Fifteenth Finance Commission," he added.
Many states of India, including Kerala, have now achieved replacement level fertility rate of about 2.1 children per woman. However, most North Indian states like Bihar (3.37), Uttar Pradesh (2.72), Jharkhand (2.57), Rajasthan (2.4), Madhya Pradesh (2.29) and Chhattisgarh (2.23) are yet to achieve the target. Overall, India has a fertility rate of 2.23 and is expected to achieve the 2.1 replacement level fertility rate by 2020.
In the last quarter century, population data of 1971 has been used for allocation of resources to the states. “The Fourteenth Finance Commission used data of 2011 together with that of 1971. The 2011 data were used to take into account the migration of population which has become large in the recent years," Isaac said.
The terms of reference (ToR) of the FFC, headed by former revenue secretary N.K. Singh, also a member of the ruling Bharatiya Janata Party, were notified by the finance ministry in November.
Apart from Singh, the members of the Commission are former economic affairs secretary Shaktikanta Das and adjunct professor at Georgetown University Anoop Singh. Former chief economic adviser Ashok Lahiri and NITI Aayog member Ramesh Chand are part-time members. The Commission, whose recommendations will be in force for five years starting 1 April 2020, has been asked to submit its report by 30 October 2019.
“The Commission shall use the population data of 2011 while making its recommendations," the ToR issued by the finance ministry said.
Among major states, Bihar (25.1%), Chhattisgarh (22.6%) and Jharkhand (22.3%) had the highest decadal (2000-2011) population growth rates, according to the 2011 Census.
On the other hand, southern and eastern states like Andhra Pradesh (11.1%), West Bengal (13.9%) and Odisha (14%) had among the lowest decadal population growth rates.
Shaibal Gupta, member-secretary of the Asian Development Research Institute in Patna and a social scientist, said Kerala had a historical advantage of higher income and literacy while the states in the Hindi heartland, specifically Bihar, have been at a disadvantage on both fronts.
“Finance Commission needs to take cognizance of the reality and using 1971 population data will be absurd," he added.
Indira Rajaraman, a member of the 13th Finance Commission, said Kerala may get a grant since the terms of reference also ask the FFC to recognize efforts made by states to achieve replacement level fertility rate.
“Just because some states have failed to achieve replacement level fertility growth rate, people of those states should not be made to suffer perennially," she added.
The practice of referring to the 1971 Census was earlier justified by some as disincentivizing states from letting their population proliferate, although there was no evidence that any state did follow such a policy. However, it resulted in lower standards of services provided by the state governments to its citizens. Such a static provision also did not take into account the effect of net migration on the state population.
The terms of reference of the FFC have shifted from the more conventional ones given to its predecessors in many respects. Seeking to strike a balance between the rights and responsibilities of states in a federal structure, the centre has asked the FFC to offer fiscal incentives to states that perform well on parameters such as improved sanitation and fewer populist measures.
The Commission has also been asked to propose measurable performance-based incentives in areas such as efforts made by states in expansion and deepening of the tax net under the goods and services tax and achievements made by states in implementation of flagship central schemes.