The Hindu Business Line : `Progress' curbs Kerala's access to Central funds

KERALA'S success in controlling population growth has hit it both directly and indirectly in terms of Central fund allocations, a working paper by the Centre for Socio-economic and Environmental Studies (CSES) has pointed out.

With the Twelfth Finance Commission allocating a weightage of 40 per cent to population, Kerala has lost out heavily in terms of allocation of grants to local bodies.

As a result, Kerala will be getting Rs 6,088 crore less than what it would have got under the award of the Tenth Finance Commission, the study conducted by Dr K.K. George, Mr K.K. Krishnakumar and Mr V.K. Praveen of CSES says.

The Twelfth Finance Commission will cover a period of five years, starting from the current year and the annual loss will amount to Rs 1,218 crore, the study said. The deviation from the past practice of using the 1971 census figures to the 2001 census figures has also hit the State.

This has been a period when Kerala has been effectively controlling its population growth, while in several other States, the population growth has continued unabated.

Kerala has also lost out with the Commission using the 2001 census figures for calculating the per capita income.

"This tends to inflate the relative position of Kerala in per capita income ... and reduces the entitlement whenever per capita income is taken as a criterion," the study said.

While the world over, regional development is measured not only in terms of per capita income, but also in terms of employment, per capita income is one of the core criterion used by the Twelfth Finance Commission, the study said.

However, per capita income can be only one of the indicators of a State's economic development or backwardness. With unemployment rate nearly three times higher than the national average, the refusal of the Finance Commission to consider employment as an indicator has hurt States such as Kerala, the study said.

While the Commission has provided Rs 16,059 crore to all the other States for upgrading the health and education services, it has made no such provision for Kerala. "The State obviously is being penalised for its success in attaining above average standards in social services like education and health care," the study noted.

Most of Kerala's achievements in education had been in literacy and school education. The Commission failed to take note of both the qualitative and quantitative backwardness of Kerala's higher education, technical education and research, the study noted.

While making no additional grants for the health sector of Kerala, the Commission like the previous ones failed to take note of the increasing demand for expenditure on health services as a result of the aging of the State's population, the study said.