Despite Protests from Southern States, Finance Panel to Allocate Resources Based on Population Data
Several leaders from south India have raised concerns that allocating resources based on population meant penalising states that have done good demographic management.
File photo of NK Singh, Chairperson, 15th Finance Commission. (Credit: Twitter@NKSingh_MP)
Bengaluru: The fifteenth Finance Commission will use the 2011 population data to allocate resources to state, despite protests from south Indian states alleging that this gave undue advantage to states with bigger population.
The Commission on Tuesday clarified that there will be no change in the terms of reference, but the concerns of south Indian states will be considered.
“In recognising reality and in recognising the need for equity, it is certainly not the commission’s intention to penalise performance. Those states which have had a credible record on demographic management need to be credibly recognised, while, of course, using the population data which we have been asked to use, namely the 2011 data,” said NK Singh, Chairperson, 15th Finance Commission.
When the decision was taken to use the 2011 population data as the base, after the commission’s formation in November 2017, several leaders from south India raised concerns that allocating resources based on population meant penalising states that have done good demographic management.
“If you read the terms of reference, apart from asking us to use the 2011 data, we have also been asked to look at measures and modalities for incentivising and suggesting measures for recognising states which have done good record in terms of demographic management. It is a challenge, but it will be the commissions’s endeavour to harmonise that while recognising the needs of population that exists today in the 2011 data and how to recognise the efficiency gains of states which have done good demographic management,” Singh added.
Citing that the population of northern states like Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh saw a bigger increase in population in the years between 1971 and 2011 as compared to southern states of Andhra Pradesh, Karnataka, Kerala and Tamil Nadu, leaders termed the use of population data to allocate resources unfair, as the ones with bigger population — a reflection of poor demographic management — was rewarded at the expense of the prosperous ones.
“The basic issue is how they will balance this. The devil is in the details. The commission must ensure the states with good demographic management must not be penalised. First, whatever data they use, the latest one must be used. Secondly, to balance out the penalisation of states that have smaller population, they can be rewarded based on other factors — one can look at the growth rate, performance over the last few years on human development index,” said Rajya Sabha MP Rajeev Gowda.
“The commission can make this explicit. Every state will then know that when we perform better we are rewarded,” he added.
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