‘South states could lose Rs. 8K crore due to 15th FC’: Thomas Isaac meets AP FM

Kerala Finance Minister Dr Thomas Isaac called on his Andhra Pradesh counterpart, Yanamala Ramakrishnudu, in Vijayawada on Monday.

The duo discussed a meeting of Finance Ministers of all states on May 7 in the city to discuss the terms of reference (ToR) of the 15th Finance Commission.

Speaking to reporters, the Kerala Finance Minister said that the southern states could potentially lose up to Rs 8,000 crore, if the ToR were implemented.

"The southern states will lose heavily with the ToR. The Prime Minister wants to compensate us with incentive clauses. However, this contributes only to 2% or 3% of total devolution," he said.

"Ramakrishnudu will submit a memorandum to the Centre after the conclusion of the conclave. The finance ministers of several states have come forward to attend the conclave and they are trying to garner the support of other states too," Isaac added.

Media reports suggested that the Finance Ministers of Odisha and West Bengal were also likely to participate in the meeting.

“Not only southern states, but some more in other parts of the country would suffer similar consequences due to the terms of reference of the finance panel and it’s time for all the states to come together to oppose the Centre’s move,” Isaac told reporters.

The proposed meeting by Andhra Pradesh's ruling Telugu Desam Party (TDP) is the first attempt to rally the states since it pulled out of the BJP-led central government and the National Democratic Alliance (NDA) over the demand for special category to the state.

The Kerala government on April 10 held a meeting of the finance ministers of the southern states, which demanded amendments to the terms of reference.

The 15th Finance Commission is a body that determines how the tax revenue collected by the Centre is distributed among the states.

Several southern states have voiced their opposition against the ‘unjust’ ToR, arguing that it will end up penalising them rather than rewarding them for their achievements. 

Prime Minister Narendra Modi rejected the allegations of southern states that the ToR of the Commission were biased against them and said it would benefit states that took population control measures.