Hyderabad: Southern states fear they will each lose Rs 20,000 crore on an average in five years to Northern states if the NDA government’s terms of reference for the 15th Finance Commission come into force from 2020-21 to 2024-25 financial year.
The Centre has told the Finance Commission to take the 2011 Census as the basis for devolution of taxes from the Centre to the states, instead of the 1971 Census used earlier.
The population growth rate in southern states has come down since 1971 compared to northern states.
Southern states will get less than Rs 5 for every Rs 100 given by the Centre, while northern states such as UP will get Rs 18, Bihar Rs 10 and Madhya Pradesh Rs 8.
Five southern states, namely, Karnataka, Kerala, Andhra Pradesh, Tamil Nadu and Telangana, have openly expressed their resentment at the Centre prescribing the 2011 Census as the benchmark.
The Telangana government has been seriously studying the impact of the 2011 Census and its finance department is preparing a report on how much of a loss TS would incur if the 2011 Census in considered.
Finance minister Etela Rajender said, “This is a matter of serious concern. We have no objection if the Centre gives incentives to northern states. But at the same time, it should ensure that south states are not de-incentivised. Any progressive state which is making rapid strides in all sectors and contributes to national development should not be discouraged by denying it its due share in Central funds.”
Southern states argue that states with low population growth are being penalised. The north states witnessed a higher population growth of 39.5 per cent while southern states witnessed an increase of 21 per cent.
