Unfair central fund distribution affects Tamil Nadu, says Panneerselvam

Tamil Nadu has been facing an unfair treatment in central funding, in terms of devolution from the Centre under the recommendations of 14th Finance Commission, as compared to the national average and even the devolutionary grant received by other States, alleges the State government. 

The Government of India has also not responded to the State's request for an ad hoc allocation in the form of special compensation, added the State Finance Minister O Panneerselvam.

The 14th Finance Commission recommended a devolution of Rs 1590 billion to Tamil Nadu for the five year period commencing from 2015-16 to 2019-20, as against the devolution of Rs 720.70 crore recommended duringh the 13th Finance Commission period from 2010-11 to 2014-15. 

This is an increase of only 121 per cent as against the average increase of 173 per cent at the all India level. Similarly placed states like Karnataka, Maharashtra, Odisha and Rajasthan, which had received devolution comparable to Tamil Nadu during the 13th Finance Commission period, have now got an increase in devolution to the tune of 198 per cent, 191 per cent, 166 per cent and 157 per cent respectively.

"Further, this increase in devolution is only a recommendation by the 14th Finance Commission, but in reality, the state has been receiving much lower levels of Central funding," said Panneerselvam in his budget speech on Thursday.

For instance, in the first three years of the 14th Finance Commission, which is 2015-16, 2016-17 and 2017-18, Tamil Nadu will receive a devolutionary grant of Rs 722.34 billion as against the recommended grant of Rs 815.70 billion. This receipt by Tamil Nadu in first three years of the 14th Finance Commission compared to the first three years of 13th Finance Commission period shows an increase of 89.35 per cent only, he alleged. The all India level average increase in the corresponding period is 134.02 per cent.

However, there has been an increase in the devolution to the other States like 155.14 per cent to Karnataka, 127.59 per cent to undivided Andhra Pradesh, 148.93 pe cent to Maharashtra, 137.70 per cent to Gujarat and 149.82 per ecnt to Kerala.

"It is solely on this ground of unfair treatment meted out to Tamil Nadu that we have been pressing the Government of India for an adhoc allocation in the form of special compensation. However, the central government has not responded positively to this request so far," said the Minister.

Taking all this into account, the central taxes as per the revised estimates has been marked at Rs 270.99 billion during 2017-18 and Rs 317.07 billion in the Budget Estimates 2018-2019. 

Grants in Aid, including GST compensation have been estimated at Rs 192.64 billion in the revised estimates 2017-18 and Rs 206.26 billion the Budget Estimates 2018-19, he said.