Kerala has a clutch of sticking points against Centre

THIRUVANANTHAPURAM: The 15th finance commission, whose 'terms of reference' have been fiercely objected to by the state, will begin its four-day visit to the state on May 28. The commission, led by its chairman N.K. Singh, will make its independent assessment of the state economy but will also be forced to respond to state's vehement opposition. Incidentally, this is also the 15th FC's first visit to a state in the country.

The chairman will be accompanied by members Shaktikanta Das, Dr Anoop Singh, Dr Ashok Lahiri, Dr Ramesh Chand, secretary Arvind Mehta and other officials. The commission, as part of efforts to understand the state economy better, will hold various interactions and meetings with ministers and senior officials. The commission will also meet leaders of various political parties, and trade and industry representatives. There will also be an interactive session with local bodies in the urban and rural areas.

The 15th FC, which has secured a preliminary understanding of the state through its interaction with the Kerala accountant general, acknowledges that the state is one of the most developed and progressive states in terms of development indicators like poverty ratio, health parameters, education parameters as well as per capita income. However, it does not seem impressed by its famed literacy levels. "Kerala's literacy level is the highest amongst all the states at 94 per cent of the population. However, learning outcome is not commensurate," an official statement said.

The state's memorandum to the commission emphasizes its major concerns, and discussions with the commission are expected around the various pints raised by the state. One, the use of 2011 census for funds transfer, as stated in the terms of reference of the 15th FC, will hurt the state's interests, and therefore the 1971 census should be persisted with. Two, if the clause in the ToR that the grant of revenue deficit grants will be reconsidered is implemented then it will affect the capital expenditure of the state.

Three, the share of divisible pool of central taxes to be transferred to the states should be raised from 42 to 50 per cent. Four, the commission should refrain from compressing the fiscal deficit to 1.7 per cent of the GDP. Five, special grants should be sanctioned for coastal development, relief for rubber farmers, forest protection, and for the rehabilitation of the Gulf returnees.