Our Bureau Secretary of Department of Economic Affairs (DEA) Subhash Chandra Garg on Monday said the terms of reference of the 15th Finance Commission are very balanced and “not one way or the other”.

His comments come after a number of southern States raised objections to the terms of reference of the Commission, under which it will use the 2011 Census as the basis for its decisions, including fund allocation. Garg declined to comment on the political aspects of the concerns but noted that the panel’s terms make two specific references to population.

While the first reference is that the Commission will use the population data of 2011 while making its recommendations, the second says it will “propose measurable performance-based incentives for States”…for “efforts and progress made in moving towards replacement rate of population growth”.

Garg noted that the second provision will, in effect, incentivise States that have done well on population control.

He also pointed out that the 14th Finance Commission did not have any specific reference years but on its own had used the years 1971 and 2011, assigning different weights to them. “Population in a way reflects the requirements or fiscal needs,” he noted.

DMK leader MK Stalin has written to PM Narendra Modi objecting to the terms of reference of the 15th Finance Commission and has said it will impact equitable allocation of funds to States that have been doing well on population control.

Karnataka CM Siddaramaiah had tweeted: “The need to transfer resources to less developed regions of the country is legitimate. Question is should this be done by under investing in the south?”

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