October 2, 2013
CHENNAI: Chief Minister J Jayalalithaa on Wednesday lashed out at the Union finance minister P Chidambaram for constituting a committee under former chief financial adviser Raghuram Rajan which ranked the states based on development.
October 2, 2013
CHENNAI: Chief Minister J Jayalalithaa on Wednesday lashed out at the Union finance minister P Chidambaram for constituting a committee under former chief financial adviser Raghuram Rajan which ranked the states based on development.
In a letter to Prime Minister Manmohan Singh, Jayalalithaa objected to Tamil Nadu being ranked third among 28 states and being mentioned as relatively developed. "I have gone through the report carefully and I am seriously concerned about the callous approach that the Union finance ministry has adopted regarding this extremely sensitive issue in Centre-state financial relations in the country. The issue of devolution of resources between the Centre and states is constitutionally the function of the Finance Commission," she said.
At a time when the 14th Finance Commission has already been constituted, by making an announcement in the budget speech of 2013-14 and thereafter in setting up the committee, the Union finance minister had committed a grave constitutional impropriety and deliberately sown the seeds of confusion in an already well-established mechanism of financial transfer from the Centre to the states evolved over the past several years, she said.
The background to the constitution of the committee was the repeated demand of the government of Bihar to confer special category status on it to enable a greater fund flow to the state to address its development deficit. Far from limiting itself to the question of enabling greater fund flow to a backward state based on its demands, the committee was given terms of reference to evolve criteria for identifying backward states and how the suggested criteria might be reflected in future planning and devolution of funds from the Centre to the states, she said.
"Our objection is the committee has been asked to examine criteria for devolution of funds from the Centre to the states, a duty laid down under Article 280 of the Constitution for the Finance Commission," she added.
Acknowledging the committee's ranking of Tamil Nadu as relatively developed, the chief minister said, "While such a ranking for the state is a matter of gratification and is recognition of the sustained developmental efforts taken in the state, there are a number of issues with the index. The attempt to treat this index as a reflection of the need of the states for resources is simplistic and flawed, since the funds flow is not the only factor relevant to correct for underdevelopment."
"Hence I strongly urge that the committee report out to be rejected and not used in any form. The 14th Finance Commission needs to be allowed to function freely without such attempts at deliberate tutoring and misleading inputs from the Government of India masquerading as intellectual attempts at redressing backwardness," she said.
Courtesy: PTI
