Plan panel to examine states’ complaints on Finance Commission

AGARTALA - The Planning Commission has constituted a high level committee to look into complaints that the 13th Finance Commission (2010-2015) has deprived many states like Tripura of its resources, a state minister said Friday.

“The 13th Finance Commission has deprived the special category states, including northeastern states, in recommending its awards and recommendations,” Tripura Finance Minister Badal Chaudhury told reporters.

“In view of the unjustified recommendations of the TFC, the resource-starved states have been facing severe financial crisis. We are now eagerly awaiting the proposal of the Planning Commission constituted committee, formed recently,” Chaudhury said.

Besides the eight northeastern states, Jammu and Kashmir, Jharkhand, Himachal Pradesh and Uttarakhand are categorised as special category states and are getting special financial assistance from the centre and various monetary panels.

“Out of 28 states in India, for five states the total award given by the TFC remains higher, in the range of more than 150 percent, compared with 12th Finance Commission. For 15 states, the increase compared with previous commissions remained in the range 100 to 150 percent, while for five states, the raise remained little less than 100 percent,” Chaudhury said in a letter to union Finance Minister Pranab Mukherjee.

“In case of three states, the percentage of increase remained far less compared with other states. These are Himachal Pradesh 50.11 percent, Tripura 55.96 percent and Uttarakhand 66.54 percent.”

“Among the three states, the resource base of Tripura is the narrowest,” Chaudhury said, adding that recommendations are neither a reflection of ground realities nor sympathetic to the state which has an excellent track record of prudent financial management.

The 13th Finance Commission, headed by economist and former union finance secretary Vijay Kelkar, was set up by a presidential order of Nov 13, 2007, to make recommendations on the tax devolution between the federal government and the states, and how to augment resources.

The commission’s recommendations were accepted by the central government in February this year.

In a separate letter to Planning Commission Deputy Chairman Montek Singh Ahluwalia, Chaudhury urged that the Tripura government be allowed open market borrowing as per the scheme of financing (SOF) of the commission to overcome the current fiscal situation.