States may get incentives for controlling population, says N K Singh

The 15th Finance Commission may consider providing incentives to states that have achieved the objective of population control, said chairman N K Singh here on Monday. 

In a departure from the earlier practice of using data from the 1971 Census, the 15th Finance Commission’s terms of reference has stipulated that data be used from the 2011 census while distributing resources. 

This has irked four southern states that have objected to the formula as they have achieved progress in controlling population over the last two decades.

“We have to abide by the terms or reference given by the President.We may consider incentivising those states that have achieved good progress in demographic management,” said Singh. 

“Nothing prevents the Finance Commission from according weightage to a population which awards efficiency and promotes equity,” added Singh.

The 14th Finance Commission, after examining various factors to represent demographic changes, chose population figures of 2011 and assigned 10% weightage in addition to the 17.5% weightage given to the 1971 population data. The weightage for the 15th Finance Commission is yet to be decided.

The recommendations of the current commission will be applicable for a period of five years from  April 1, 2020. In 2015, the Centre accepted the recommendations of the 14th Finance Commission and increased the share of the divisible pool to 42 per cent from 32 per cent. 

Apart from this, to promote fiscal prudence among states, the terms of reference of the finance commission for the first time includes laying the roadmap for use of Article 293 (3) of the Constitution, he said. 

Article 293(3) deals with giving permission to states to borrow beyond the stipulated limit.

Moreover, Singh said, managing corporate debt was key to growth.