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Finance Ministers to discuss wider range of issues
Context:
- Andhra Pradesh will be soon hosting a second round of Finance Ministers’ conclave on May, 7th in Vijayawada.
Salient features of the second edition of the Finance Ministers conclave:
- The horizons of the second edition of the Finance Ministers conclave are being widened to pave way for the participation of other States such as Mizoram, Odisha, Punjab and Delhi.
- Tamil Nadu and Telangana, which skipped the first meeting at Thiruvananthapuram, are also expected to take part in the meeting.
- The meeting will also decide the course of action such as submitting a representation to Union Finance Minister Arun Jaitley or President Ramnath Kovind.
- The meeting is aimed at discussing the adverse terms of reference in the 15th Finance Commission.
Consequences of implementing terms of reference (ToR) in the 15th Finance Commission :
- Every State would be at the receiving end if the ToR were to be considered.
- The ToR is considered as a deliberate attempt to forcibly impose conditions on and cut down tax devolutions.
- It was expected that States would lose about Rs 80,000 crore per annum.
- Tamil Nadu would be the worst affected by the ToR’s recommendation to use the 2011 census.
Way ahead:
- The Centre has plans to do away with the revenue deficit grant, a constitutional right of the States.
- Mere appeals to the States to reduce the tax would not suffice, the Centre should also bring down duties on petroleum products.
