Thangam Thennarasu for 50% share in central tax devolution
Tamil Nadu Finance Minister Thangam Thennarasu alleged that Tamil Nadu had been consistently penalized by successive finance commissions for its better performance and that its share in devolution had been reduced from 7.931 per cent during the 9th Finance Commission to a mere 4.079 per cent in the 15th commission.
Speaking at the one-day conclave of State finance ministers on the 16th finance commission at Thiruvananthapuram on Thursday, Thennarasu said the Indian polity had an inherent imbalance in the distribution of powers and responsibilities between the Union and the States.
‘While States are entrusted with the majority of responsibilities related to the development of society and the delivery of public services including education, health, agriculture, social welfare, the Union retains the majority of the powers of revenue generation,’ he pointed out.
I would like to sincerely appreciate the Government of Kerala for organizing this conclave of similarly placed States to exchange their views on the 16th Finance Commission. This platform affords an excellent opportunity for all the participating states to voice our shared concerns.
Despite successive finance commissions trying to increase the distribution of net proceeds between Centre and States, it had not happened, he said. While the 15th commission recommended 41% evolution, the effective devolution was only 31.42% of the gross tax revenue in the first four years of the award.
While on one hand, the effective devolution was less due to imposition of cess and surcharges, on the other, the counterpart funding of the State Governments in centrally sponsored schemes had been increased due to change in the sharing pattern, which was a double blow to the States that had reduced their fiscal space for existing and new state schemes for sectors mandated under the Constitution, he said.