Thiruvananthapuram | The finance ministers of four opposition-ruled states expressed solidarity with Kerala on Thursday in its quest for fiscal flexibility and a performance-based share of funds from the Central government.
The non-BJP-ruled states --Telangana, Tamil Nadu, Karnataka and Punjab -- took part in the conclave organised by the Left-ruled Kerala here, which was also attended by the senior officials of the participating states.
Telangana Deputy Chief Minister and Finance Minister, Bhatti Vikramarka Mallu, Tamil Nadu Finance Minister Thangam Thennarasu, Karnataka Revenue Minister, Krishna Byre Gowda, and Punjab Finance Minister Sardar Harpal Singh Cheema took part in the conclave and raised voices against the fiscal policies of the BJP-led Central government.
Earlier, Kerala Chief Minister Pinarayi Vijayan inaugurated the conclave presided over by Finance Minister K N Balagopal and attended by Leader of Opposition in the Kerala Assembly, V D Satheesan.
Addressing the gathering, Karnataka Minister Gowda said there was no reciprocation from the union government for the states that have been contributing to the Centre.
Punjab Minister Cheema said he expects the 16th Finance Commission to devise a formula for the allocation of the divisible pool that not only incentivises states to perform better on the development matters but also allocates ample resources to the states that need support to enhance their performance.
Telangana Minister Mallu said the Centre often exceeds its own fiscal deficit target and creates an unjust situation where fiscally responsible states are restricted in their borrowing capacity, while the union government enjoys greater financial flexibility.
"It is necessary that the Kerala interpretation of Article 293 is followed and the powers of Centre are redefined in favour of state fiscal autonomy. The framers of our Constitution never intended centralised financial control. The Finance Commission was established to ensure fair and equitable distribution of resources between the Centre and the states.
"I suggest that we study the impact of devolving more funds to the poorest states so that we can explore changes if necessary," Mulla said.
The Telangana Dy CM said there should be an increase in the states' share in Central taxes from 41 per cent to 50 per cent, resisting the Centre's increasing use of cesses and surcharges, reducing the Centrally sponsored schemes and allowing the states to spend on their local priorities.
He said it was not just about technical adjustments but was about justice, equity and the future of Indian federalism.
"We must ensure our states have the resources and autonomy needed to chart their own development path," Mulla said.
Meanwhile, Tamil Nadu Minister Thennarasu said the Indian polity has an "inherent imbalance" in the distribution of powers and responsibilities between union and the states.
He said while the states are entrusted with the majority of responsibility related to the development of society and delivery of public services, including education, health, agriculture, and social welfare, the union retains the majority of the powers of revenue generation.
"It is imperative that states collectively advocate for a 50 per cent share in the Central tax devolution," the Tamil Nadu Minister said.
He also called for urging the Finance Commission to devise a mechanism to restrict the use of cess and surcharges and recommend appropriate measures to protect the interests of the states.
He added that Tamil Nadu was consistently penalised by successive Finance Commissions for its better performance and its share in devolution has been reduced to a mere 4.079 per cent in the 15th Finance Commission.
"This continuous reduction has cost a loss of Rs 3.5 lakh crore to the state of Tamil Nadu, which is equal to 43 per cent of our outstanding debt," Thennarasu said.
Gowda said it was a quest for justice and federalism.
"We do not demand equal reciprocation. We are willing to share what we have with others who may not have the equal what we have. So we are willing to be net contributors, but at the same time, for us to continue to contribute to the union, we must do well also.
"If we do well, we could contribute a disproportionately larger share to the union. In the interest of the union it is paramount that some of our state interests are also safeguarded, protected and reciprocated. And hence it is a quest for justice and federalism," Gowda said.
He pointed out that the participating states have high per capita income, high development rate and added that Kerala tops the whole country in the Human Development Index.
"Why? Because we have made investments in all these sectors. And these are not sectors where we can make investment once and forget about it. These investments need to be continuously made even today.
"If not, we cannot provide the social infrastructure, economic infrastructure, and human development that the whole country needs. So the welfare of these states is not only crucial for our own states but for national progress," Gowda said.
Gowda said by penalising performance and efficiency, the union government was sending a message that just because you are doing well, you are going to be cut.
"Then where is the incentive for performance and progress? On the other hand, there is an unchecked reward for poorer performance. So this creates a perverse incentive for not making progress," he said.
The ministers said the progress, the performance and the efficiency should not be penalised.
