Discontent and unrest: MK Stalin's warning to PM Narendra Modi on money share of states

NEW DELHI: DMK working president MK Stalin has formally sounded the bugle in the upcoming battle over how the Central government disburses money to state governments. On Wednesday, he wrote one letter to Prime Minister Narendra Modi and a separate letter to the Chief Ministers of 10 states which will be adversely affected by the Centre's decisions

The issue revolves around the move of the Fifteenth Finance Commission (XVFC) to use the 2011 census as a basis for all decision making, including the allocation of funds and the delimitation of constituencies to both the Lok Sabha and the Assemblies.

Since the 42nd Constitutional amendment of 1976, the 1971 census has been used for these purposes. This was done to assure states that were making progress on population control that they would not lose out to states that failed at population control. The cast of states that had expressed concern are similar to the list that Stalin has reached out to. When this ran out in 2001, the deadline was further extended to 2026 by the 84th Constitutional amendment.

 

Union Govt's ToR for XV FC, to use 2011 census for financial devolution will affect the equitable nd just distribution of central tax revenues to the states which implemented effective population control measures,will be a travesty of justice,unconstitutional and undemocratic. #2 — M.K.Stalin (@mkstalin) March 21, 2018

The govt's unilateral decision contradicts the principles of federalism and states could be reduced to that of a municipality, I urge the centre to frame a new ToR in consultation with all the states and GST Council
#3 — M.K.Stalin (@mkstalin) March 21, 2018

 

Stalin wrote two letters, very similar in content. One was addressed to PM Modi. The other was addressed to the Chief Ministers of Tamil Nadu, Puducherry, Kerala, Andhra Pradesh, Telangana, Karnataka, Odisha, West Bengal, Delhi and Punjab. Notably, none of the states in question have a BJP or even an NDA Chief Minister.

 

I have written to @CMOTamilnadu @VNarayanasami @vijayanpinarayi @ncbn@TelanganaCMO@siddaramaiah@Naveen_Odisha @MamataOfficial@ArvindKejriwal @capt_amarinder
Regarding the unilateral decision of the centre which affects the fiscal autonomy of the states. #1 pic.twitter.com/w4ukCm566p — M.K.Stalin (@mkstalin) March 21, 2018

 

Stalin raised this in his letter to the Prime Minister, and to the Chief Ministers. He said the XVFC's decision to use the 2011 census had been made without consulting state governments. This, Stalin said, "… will negatively impact the allocations to many progressive states like ours in a compound way. On the one hand, we will be losing disproportionally by the use of2011 census data as the basis, and on the other, we will also be deprived of any incentive… as we achieved (or exceeded) the neutral net reproductive rate target long ago. Taken together, these must be construed as the most counter-productive measures taken hitherto with regard to population control incentives provided by the central government."

READ FULL TEXT of the letters MK Stalin wrote

"In fact, these drastic ToR changes will reduce the distribution of central revenues to the progressive states by a very substantial margin, which will not only be a travesty of justice but will also be construed as an ill-conceived effort to systematically divert resources to States which have never made serious attempts at population control," Stalin letter added.

He also condemned as undemocratic that unelected members of the Finance Commission could make such a decision without consulting the state governments. Stalin told the Prime Minister that such decisions could be made under the framework of consultation with the states and in the GST Council. In his letter to the other Chief Ministers, he urged them to join him in pressing the Centre on this front. 

"This is the only way to ensure that that there will not be grave injustice perpetrated upon our States in the manner of the devolution of taxes, which will almost certainly lead to grave discontent and unrest amongst those wronged by such actions," he urged and warned.

There has been growing concern in governments of more developed states that have successfully controlled their population growth that they could lose the number of seats they have in the Lok Sabha and get even lesser money from the Centre than they have been getting so far.

The issue has gained urgency in recent weeks, with the Chief Ministers of the three of the five southern states addressing the imbalance in how much money they remit to the Centre and how much they get in return. Karnataka Chief Minister Siddaramaiah had gone so far as to articulate it as the southern sates subsidising the northern ones, and that any incentive for the southern states to keep on the path of development was being taken away.

Just a day later, Stalin had told reporters that he would support any demand from the Southern states to break away from India.