CM reviews SC order, impact of 15th Financial Commission

He also reviewed the projected impact of the devolution of funds in the 15th Finance Commission on a day when neighbouring Kerala was hosting a conference for South Indian states on the projected downward revision of devolution of funds from the 15th Finance Commission.

The high-level meeting here was attended by his Cabinet’s senior colleagues and officials during which the future course to ensure implementation of the apex court’s final verdict was deliberated.

The meeting was attended by Law Minster C Ve Shanmugam, who was part of the legal team which was present in the Supreme Court while it heard the Contempt plea filed by the state, and as well as the clarification petition filed by the Centre.

Deputy Chief Minister O Panneerselvam, Forest Minister Dindigul C Sreenivasan, School Education Minister KA Sengottaiyan, Municipal Administration Minister SP Velumani, Fisheries Minister D Jayakumar and senior officials were present during the meeting.

A rough estimate suggested that the state stands to lose nearly Rs 40,000 crore in the revised terms of reference of the Commission.

The 15th Finance Commission, constituted in November 2017, has fixed population as a primary indicator for distribution of taxes. While calculating the share, the Commission had said it would use data from the 2011 census to make recommendations for the five-year period beginning from 2020.

The Opposition, including the DMK, had explicitly condemned the shift and had been insisting that the recommendations be based on 1971 census data.

They had reasoned that factoring population as an important criterion would only penalise the state for its successful implementation of the population control measures and socio-economic programmes.

“The Terms of Reference for the Commission will affect equitable distribution of the central tax revenue to the states. Tamil Nadu will lose if 2011 census data is used and also it will be deprived of any incentive as the state has achieved the neutral net reproductive rate target long back,” the Opposition had pointed out.