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The ambiguous wording of the terms of reference of the 15th Finance Commission — which was constituted last year under the Chairmanship of NK Singh, former Secretary to the Government of India — has triggered anxiety among some States. The sense of disquiet, articulated most strongly by Karnataka Chief Minister Siddaramaiah, derives primarily from the perception that the specification that the Commission “shall use the population data of 2011 while making its recommendations” effectively punishes States that have performed better in implementing population control measures. In the way that it is worded, it appears to mark a major departure from the formula hitherto deployed while drawing up the States’ share of the allocations from the Central pool. Up until the 13th Commission, the allocation formula drew only on the 1971 Census data; the 14th Commission, however, assigned a 10 per cent weightage to the population as derived from the 2011 Census. It appears that the 15th Commission will rely solely on the 2011 Census data.
Given the vast strides made in the realm of population control — more by some States than by others — since 1971, such a reading of the terms of reference has justifiably aggrieved States that have performed relatively better on population control. Their understanding that they stand to lose under this formula is not entirely without merit. In fairness, it bears mention that the terms of the 15th Commission additionally provide, for the first time, for the consideration of “measurable performance-based incentives” in, among other areas, the expansion of the tax net under the Goods and Services Tax regime and progress made in promoting ease of doing business. Despite such an emphasis on good governance metrics, the phrasing of the terms of reference in respect of the population data sows the seeds of doubts about the formula envisaged. Given the loaded nature of the politics of population control metrics, the Centre would do well to clarify the precise terms in such a way that States that have outperformed on this count don’t feel punished.
Associate Editor
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