Several states mulling joint memorandum on finance panel: Minister

Thiruvananthapuram : Political leadership of south Indian states of Kerala, Karnataka, Andhra Pradesh and union territory of Puducherry on Tuesday mulled the terms of reference of the 15th Finance Commission and plan to submit a joint memorandum to the President on the issue, a Minister said.

"We have decided to prepare a joint memorandum on the manner in which the Finance Commission should go about things and take different states into confidence," Kerala Finance Minister Thomas Issac told the media here.

The states would even explore legal steps on the issue, Issac said at the end of a workshop he organised here for his counterparts from southern states to facilitate a review and critique of the terms of reference.

"We have entrusted (state-owned) Gulati Institute of Finance and Taxation to prepare a draft and by end of April or early May, we will meet again to finalise the memorandum in Visakhapatnam. We will also invite governments of other non-BJP ruled states. Thereafter, the memorandum will be send to the President and others," Issac said.

Earlier, in his inaugural address at the one-day event, Kerala Chief Minister Pinarayi Vijayan said it's time they stood together to demand reframing of the terms of reference), as it was necessary to save the federal structure of the Indian Union.

The Finance Commission -- which delves into the financial relations between the Centre and states -- should be guided more by its constitutional mandate than arbitrary terms of reference, Vijayan said.

"... (there is) a conspicuous bias in-built in the terms of reference of the new commission. It is widely feared that these terms framed by the Centre will prevent the panel from fulfilling its constitutional responsibility," Vijayan added.

Apart from Vijayan and Issac, those who attended the workshop were Puducherry Chief Minister V. Narayanasamy, Karnataka Agriculture Minister Krishna Byre Gowda, Andhra Pradesh Finance Minister Yanamala Rama Krishnudu and other top officials. Representatives from Telengana and Tamil Nadu were absent.

Vijayan said all states should appeal to the central government to reframe the terms of reference.

"The reframing of the terms of reference is imperative to strengthen the federal structure of the country and to reinforce its unity and integrity," said Vijayan, a senior Communist Party of India-Marxist leader from Kerala.

Vijayan said the commission's role assumes significance, given the fact that the Centre is given near monopoly over the right to mobilise resources.

"We are all aware that the terms of reference have created apprehension about the principles of fairness and equity in the distribution of national resources for development. The unity of India can be preserved only if there is real fairness and equity in devolution of financial powers and resources to the states by the Centre," the Chief Minister added.

Vijayan expressed reservation over the Financial Commission proposal for "measurable performance-based-incentives" which he claimed was an attack on the federal structure of the Indian state.

"Such terms of reference, we fear, might end up altering the commission's status from a constitutional authority entrusted with devolution of national fiscal resources to an administrative mechanism for fiscal administration and monitoring," added Vijayan.

Karnataka Agriculture Minister Krishna Byre Gowda, in his address, said all states that performed their duty of bringing down the population in their respective jurisdictions, were set to lose out since the plan is to shift the base from 1971 to 2011 Census.

Ramakrishnudu flayed the Centre for alleged arbitrary manner in fixing the commission's terms of reference.

Puducherry's Narayanasamy, who also holds the finance portfolio, complained that when it came to central schemes, the Union government treated Puducherry as a state but with regard to grants it was treated as a union territory.