Kerala Plans To Rally States Against Centre With Fiscal Conclave On 12 September; Centre-State Relations, Tax Devolution Key Issues

The Kerala government is set to host a Fiscal Conclave on 12 September in Thiruvananthapuram, aimed at solidifying a unified stance among states on issues concerning centre-state relations and tax devolution.

The conclave is expected to generate data and models that can be presented to convince the 16th Finance Commission (FC) of the discrimination faced by performing states like Kerala.

The 16th Financial Commission, chaired by Aravind Panagariya who was the first vice-chairman of NITI Aayog, is scheduled to visit Kerala in December.

This Conclave also serves as a preparatory exercise, aiming to formulate strong arguments to present before the 16th FC members.

"The Commission will study the memoranda submitted by the states and, keeping in view the overall fiscal condition of the country, arrive at a tax devolution formula. This time we want the share of states to improve," Kerala Finance Minister K N Balagopal said on Thursday while announcing state’s decision to host the Fiscal Conclave, Manorama Online reported.

Punjab, Telangana, Tamil Nadu, and Karnataka — all of them ruled by non-NDA parties - are reportedly the four state that have confirmed their participation in the Conclave.

Three of these states will be represented by their finance ministers — Tamil Nadu - Thangam Thennarasu; Punjab - Harpal Singh Cheema,; Telengana - Bhatti Vikramarka Mallu (who is also the state's Deputy Chief Minister).

Karnataka will be represented by its revenue minister Krishna Byre Gowda. Chief Minister Siddaramaiah is also Karnataka's Finance Minister.

Finance secretaries from each of these states will also be part of the discussions.

Kerala Chief Minister Pinarayi Vijayan will inaugurate the event, and Opposition Leader V D Satheesan is also expected to attend.

According to the Kerala Finance Minister, the Conclave’s main focus will be on centre-state relations and the fiscal devolution to states.

Balagopal said that Kerala received a 3.8 per cent share from the divisible pool after the 10th Finance Commission's recommendations.

"After the 15th FC, it has halved to 1.92 per cent. If we had received Rs 48,000 crore from the central pool after the 10th FC, the devolution has dwindled to Rs 24,000 crore after the 15th FC," he said.

"Nonetheless, there are many states in the country where the 10th FC share has either been sustained or even improved upon," the Kerala Finance Minister added.

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