Devolution of funds should be based on population: Chandy

Kerala today asked the 14th Finance Commission to take population factor as the main principle to determine the share of Central taxes to states.
Presenting the state's view before the commission here, Chief Minister Oommen Chandy said a new formula for devolution of Central taxes and larger devolution of resources was the most important issue.
"Devolution needs to be based mainly on the population factor, as this is what determines the quantum and nature of expenditure states have to incur for providing services and the functioning of governance," Chandy said.
State wanted the Commission to enhance to 50 per cent from the existing 32 per cent the division pool of Central taxes, he said.

Among other things, Chandy wanted the Commission to increase the grant to local self government institutions to five per cent of the divisible pool.
For Western Ghats preservation and conservation, Chandy asked the commission to provide an amount of Rs 1,200 crore to the state.

Meanwhile, State Finance Minister K M Mani said Kerala has asked the commission to waive all pending Central loans which would come to around Rs 3000 crore.
"This request has been made in the light of the state being a debt stressed state," he said.
Talking to reporters, Mani said state got Rs 40,325 crore, including Rs 33,984 crore share from tax revenue under the 13th Finance Comission.

The 14th Finance Commission, headed by former RBI Governor Y V Reddy is on a two-day visit to the state, to elicit the views of the state government and other stake-holders to determine the resources to be given to the state for the next five years.