Kerala finance minister Thomas Isaac. (Photo: Ramesh Pathania/Mint)
Kerala finance minister Thomas Isaac. (Photo: Ramesh Pathania/Mint)

Kerala to flag concerns against FFC’s terms of reference this month

  • Last year, Kerala had led the initiative to hold a conclave of finance ministers, mostly from the southern states, to protest against the ToR
  • The recommendations of the FFC, due next year, will have a crucial bearing on how funds to the states are allocated by the Centre

The Kerala government, in association with think tank Gulati Institute of Finance and Taxation, will hold a seminar in Delhi on 14 September to flag concerns about the widening of the 15th Finance Commission’s (FFC’s) terms of reference (ToR) to set up a separate defence fund at the expense of shares to states.

The Kerala government has invited finance ministers of various states, political leaders, jurists, and scholars for the event, effectively setting the stage set for a collision course between the Centre and the states on the Commission’s ToR, as had happened last year.

The seminar will discuss the implications of widening the ToR on state finances, according to the invitation letter sent to participants, a copy of which was seen by Mint.

“We will discuss if there is a remedial possibility and constitutional legalities. We are expecting some of the top jurists in the country to participate," Kerala finance minister Thomas Isaac said over phone.

“There may be a session with three-four finance ministers. We are expecting the finance ministers of Delhi, West Bengal and even others from Congress and Bharatiya Janata Party-ruled states to participate. An Odisha MP raised the issue in Parliament. We have reached out to him too. Leaders of political parties will also attend. We would like to have Sitaram Yechury, D. Raja, (M.K) Stalin, and others to participate," he said.

Last year, Kerala had led the initiative to hold a conclave of finance ministers, mostly from the southern states, to protest against the ToR. The event, held in the capital city of Thiruvananthapuram, saw finance ministers of southern states criticizing the Centre heavily on the issue, triggering a national debate. After a second such conclave in Andhra Pradesh’s Vijayawada, the participating states had collectively submitted a memorandum to President Ram Nath Kovind.

The recommendations of the FFC, due next year, will have a crucial bearing on how funds to the states are allocated by the Centre. Already, southern states such as Kerala are up in arms against the Centre, asking the Commission to look at the 2011 census, instead of the 1971 census, as the criteria for revenue devolution. These states say having the 1971 census as the criteria will place them at a disadvantage as they have implemented population control programmes better than states in the north.

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