Ad Here  
July
August
September
October
November
December
 
 
City of foaming lakes and fire Deputy Collector Sindhu! State of the States A blueprint for the future Flurry of collaborations inked by AP Enchanting and enterprising Tamil Nadu States Roundup Industrial corridors to boost economy Land scams rock AP & TS Stirring the political cauldron Inter-State boundary Why the Congress won in Karnataka SIPB clears big proposals Global Investors Meet Post Poned ODISHA Hype on Hyperloop TN can leverage NLC’s strengths... Time to wake up Promise of a productive year Pioneering education model Bifurcation yet to end water wars Mango Diplomacy Bhubaneswar IIT cries for completion Doubling production and tripling farmers’ income... CII to set up tourism bureaus An industrious idea Leaky old lorries, mini cabs for techies... Development depends on land availability... Thalaivaa Infrastructure to the FORE Launch of ins vikrant, India’s first indigenous aircraft carrier It indeed is attractive for investments Of development and welfare KNPP with the grid Strike over salary hike Nod to cow slaughter bill Enticing pest traps Technology has raised the bar... A giant push for millets Homestays, a budding tourism industry A year of Telangana When business flocks to MP... MOUs worth Rs.10.54 lakh crore signed Monsoon fury MCL has a taste of judicial activism! KTR releases Annual Report States - Kerala Benevolent businessthan... A neta at it again! It’s Karnataka chalo for Amit Shah? Info-Park, more space Power for all Waste disposal model Come to Tamil Nadu where the action is... With agriculture at its heart... Municipal Elections All these happened in TN… Reducing carbon footprint... Kochi Metro Rail Project Vedanta to close Lanjigarh refinery Wouldn’t the Mahatma like clean restrooms in our cities! Global meets galore State Forward Fanciful Rao and tech-savvy Naidu Oh, la la. AP in better shape Divide & Prosper Tasks for the new government Lingayats get a reminder: it’s poll time More government apps Bringing magic of Rajasthan alive Green crimes galore Bus services hit Competing for good: Tale of two states ‘E’ for enterprise Miners asked to pay more Winds of change... TN to suffer serious loss TN to suffer serious loss Land acquisition policy is ahead of national policy... States - Odisha Illegal mining of sand Infra boost to the new capital KCR’s I-day bonanza State under siege
 
TN to suffer serious loss
The recommendations of the Fourteenth Finance Commission (FFC) are unfavourable to Tamil Nadu: estimated annual loss of Rs 6000 crore.

In a well-reasoned analysis, a press note issued by the Commissionerate of Planning explains the drop in the share in the divisible pool of Central taxes: the 13th Finance Commission fixed this at 4.97 per cent whereas in the FFC it has come down to 4.02 per cent resulting in a sizeable loss.

 Tamil Nadu Chief Minister represented the FFC to increase the share of the state in the divisible pool of Central taxes. There is, satisfaction that the FFC has recommended a increase of states’ share from 32 per cent to 42 per cent.

 

Adverse impact of change in criteria

 The FFC changed the formula for devolution giving weightage of 17.5 per cent for population in 1971, 15 per cent for area, 10 per cent for demographic change in 2011 and 50 per cent for income distance.

 Better attention to population growth paid by Tamil Nadu is penalised by this change. Tamil Nadu has moved to a small family norm and thus a lower weightage for 1971 population (from 25 per cent to 17.5 per cent) adversely affects this.  The increase in the area criterion from 10 per cent to 15 per cent is another point of discomfort. The state points to the protection of smaller states by a minimum two per cent share. Tamil Nadu’s share in the weighted area at 3.373 per cent does not attend to the higher density of population.  Likewise, weightage for the forest cover also adversely affects Tamil Nadu which has only 3.32 per cent forest area.

 Income distance criterion of 50 per cent weightage understandably favours poorer states many of which have also performed poorly in terms of fiscal prudence and efficiency. The press note points to the three-year average per capita GSDP for 2010-11 to 2012-13 for Tamil Nadu at Rs 98,237, is more than 50 per cent over the national average of Rs 64,290.

 

Prudent fiscal management punished

Under the income distance criterion of the FFC, Tamil Nadu’s share works out to just 2.689 per cent relating to a population share of 5.96 per cent. This has grievously affected the state.

For decades Tamil Nadu has been known for its prudent fiscal administration. There is, understandably disappointment and resentment over the lack of recognition to this aspect.

Author :
Reported On :
Sector :
Shoulder :
RELATED NEWS
ABOUT IE
IE, the business magazine from south was launched in 1968 and pioneered business journalism in south. Through the 45 years IE has been focusing on well-presented and well-researched articles. When giants in the industry stumbled to keep pace with the digital revolution, IE stayed affixed embracing technology.
Read more
 
PRIVACY POLICY
Economist Communications Ltd is committed to ensuring that your privacy is protected.
Read more
TERMS AND CONDITIONS
You agree that your use of this Website and the purchase of the magazine will be governed by these terms and conditions.
Read more
 
CONTACT US
S-15, Industrial Estate,
Guindy,
Chennai - 600 032.
PHONE: +91 44 22501236
EMAIL: indecom1968@gmail.com