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LATEST NEWS UPDATES | Non-NDA states flay change 15th Finance panel's terms of reference -Ronak Chhabra

Non-NDA states flay change 15th Finance panel's terms of reference -Ronak Chhabra

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published Published on Sep 15, 2019   modified Modified on Sep 15, 2019
-Newsclick.in

The Modi Government’s sudden modification of the terms of reference via a presidential order on July 29 is an attempt to squeeze the revenue share of states, say Opposition leaders.

New Delhi:
The Narendra Modi government’s decision to change the terms of reference of the 15th Finance Commission through a Presidential Order is aimed at further squeezing the revenue share of states, without even consulting them, various finance ministers of non-BJP ruled states and Opposition leaders said at a seminar here on Saturday. In particular, most leaders severely critical of the Bharatiya Janata Party-led Central government’s move to create a defence and internal security fund by dipping into financial resources of the state.

The 15th Finance Commission is scheduled to submit its report by November 30. On July 29, the Modi Government suddenly modified the terms of reference of the Commission, which has invited widespread criticism from Opposition-ruled states, as they were not consulted on the issue.

The objective of the Finance Commission is to decide how much taxes and resources – collected by the Central government – will be transferred to each state. After considering factors like state’s population, average income etc., a formula is created

However, the Centre’s sudden decision to bring in ‘additional’ terms of references of the 15th Finance Commission, has raised several concerns among states, which were aired at national seminar in the Capital, organised by the Gulati Institute of Finance and Taxation, an autonomous institution under the Kerala government, ruled by the Left Democratic Front.

Several finance ministers of non-National Democratic Alliance state governments, such as Thomas Isaac from Kerala,  Manish Sisodia from Delhi, and former Prime Minister Manmohan Singh, former Finance Minister of Jammu & Kashmir, Haseeb A Drabu, Venkatesh Athreya, former Professor of Economics, Bharathidasan University, Harsh Mander, Director of Centre for Equity Studies, and Sitaram Yechury, general secretary of Communist Party of India (Marxist) were among the speakers.

Most of the participants in the seminar criticised the creation of a defence and internal security fund by the Modi government. The Centre has decided to set aside money from gross tax revenues before sharing these with the states, thus resulting in fund cuts of states.  Criticising this move, Yechury said it was a direct attack on the idea of “cooperative federalism”, adding that such additional changes at the eleventh hour were “unconstitutional.”

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Newsclick.in, 14 September, 2019, https://www.newsclick.in/non-nda-states-flay-change-15th-finance-panels-terms-reference?fbclid=IwAR1f5Nv0SnPi-6G5Pt33hBOJapKEBJ3lPXZ374z3PeMU8cPl62LG4OXevq8


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