CPI-M terms 15th Finance Commission’s TOR anti-federal

The Communist Party of India-Marxist (CPI-M) on Friday voiced over what it called the anti-federal and anti-democratic underpinnings of the Terms of Reference (TOR) of the 15th Union Finance Commission.

In a resolution passed by the 22nd Congress of the CPI-M here on Friday, the party said that the terms or reference were “intended” to reduce the share of the states in the overall tax devolution and “squeeze the fiscal space” available to them.

It also accused the Bharatiya Janata Party (BJP)-led Union government of trying to utilize the 15th Finance Commission to “further centralise financial powers”.

“As a result of the proposed change in the population base year, the TOR threaten also to seriously impair the finances of state governments that have performed well with respect to population control,” the resolution said.

Senior party leader Prakash Karat told reporters that the terms of reference are on assault of federal principles.

He also alleged that the central government has brought extraneous elements into the terms of reference.

The Marxist leader said that with the population criteria having being changed from 1971 to 2011, the party feels that the state who have taken steps to control population and who succeeded in population control will suffer in terms of financial resources being devolved.

On one of the terms of reference which speaks of “control or lack of it in incurring expenditure on populist measures”, Karat said this was not the business of Finance Commission to decide as this should be decided by elected governments and representatives.

The party expressed the apprehension that all social welfare measures may be considered populist by the Finance Commission and said that this move would curb autonomy and rights of states.

The resolution said that with the TOR suggesting that the 15th Finance Commission should review the recommendation of the 14th Finance Commission to raise the share of states in central taxes to 42 per cent and whether the constitutional provision to provide revenue deficit grants to states be continued at all, “the policies that follow from both of these will certainly reduce resource devolution to the states”.

“There are clear suggestions that the Finance Commission enforce the recommendations of the Fiscal Responsibility and Budget Management Act Review Committee Report. Any such move will significantly reduce the fiscal deficit and debt-GDP ratio permitted for the states, and will severely curtail the fiscal space available to states,” it added.

Noting that Finance Ministers of southern states have raised their objections to the terms of reference, the CPI-M hoped that more states will take a stand. The resolution said the party would mobilize public opinion for revising terms of reference.

In another resolution, the party Congress condemned what it calls the BJP-led government’s latest attack on the working class in the form of extending Fixed Term Employment to all sectors. “This move is an integral part of the neoliberal agenda of labour law reforms that are meant to impose conditions of virtual slavery on the working class,” said the resolution.

The resolution noted that the move would provide employers with the freedom to hire and fire workers. “It is one of the measures intended to facilitate movement up the ladder of the ease of doing business index of the World Bank by depriving workers of job security and pre-empting their united struggles to improve their conditions by getting organised,” it added.

Rejecting the BJP government’s claim that this will generate employment, particularly for women, the CPI-M demanded that the BJP government immediately withdraw the notification on Fixed Term Employment.