Special category states unhappy with finance panel: Tripura minister

AGARTALA - Chief ministers and finance ministers of the 12 ’special category states’, including those in the northeast, have voiced their discontent over the 13th Finance Commission’s (TFC) awards and recommendations, a Tripura minister said here Thursday.

The ministers explained their difficulties at a meeting of finance ministers in New Delhi Wednesday.

Besides the eight northeastern states, Jammu and Kashmir, Jharkhand, Himachal Pradesh and Uttarakhand are designated as special category states and get special financial assistance from New Delhi and various monetary panels.

“The 13th Finance Commission (2010-2015) did not follow its own formula on… state governments’ employees’ salary and pension expenditures,” Tripura Finance Minister Badal Chaudhury told reporters here.

“Again, the union finance ministry does not follow the Planning Commission’s method and recommendations on Open Market Borrowing (OMB) by the state governments,” he said.

“In view of the unsubstantiated recommendations of the TFC, the resource-starved states have been facing severe financial crisis,” the minister said.

Chaudhury said the Tripura government had to undergo serious fiscal hardship, particularly in ensuring timely payment of various committed liabilities, including salaries and pensions.

“The state government has also been forced to put all ongoing development activities on hold for want of financial resources,” the Tripura minister said.

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 tax devolution between the federal government and the states and to suggest how to augment resources.

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

Referring to his separate meeting with union Finance Minister Pranab Mukherjee, the Tripura finance minister said: “We have demanded central assistance on priority basis to bridge the gap of Rs.7,362.24 crore created by the TFC award in respect of committed liabilities.”

“Surprisingly, the formula devised by the TFC is applied for assessment of salary expenditure for the period of 2010-2015. There is a shortfall of Rs.1,215.08 crore against salary of Tripura government employees.”

Explaining the Tripura government’s prudent financial management during the past many years, Chaudhury said that the state government had been one of the few states in India to have enacted the Financial Reconstruction Budgetary Management (FRBM) act in 2005.

“Mukherjee has also praised for the good financial management in Tripura. Among the three Left Front ruled states (West Bengal, Kerala and Tripura), Tripura’s fiscal management is the best,” Chaudhury stated.