FinCom sets up experts panel for advise on its ToR

The 15th Finance Commission today set up an expert committee which will advise it on matters related to the Terms of Reference (ToR) that have come under attack from some non-BJP ruled states such as Andhra Pradesh and Kerala.

Some southern states have criticised the ToR saying progressive states would lose revenue if 2011 census was taken as base for devolution of central funds.

The Advisory Council, a government release said, has been constituted by the Commission "to advise on the matters related to its Terms of Reference".

The panel will advise the Commission on any issue or subject related to the ToR and provide assistance in the preparation of any paper or research study which would enhance the Commission's understanding on the issues containing in its ToR.

Arvind Virmani, former Chief Economic Advisor, Surjit S Bhalla, Part-time Member of PMEAC, Sanjeev Gupta, a former IMF deputy director, Pinaki Chakraborty, Professor (NIPFP), Sajjid Chinoy of JP Morgan and Neelkanth Mishra of Credit Suisse India are the members of the panel.

The committee will also help in broadening the Commission's "ambit and understanding" to seek best national and international practices on matters pertaining to fiscal devolution and improving the quality and reach and enforcement of its recommendations, the release said.

Opposing the ToR of the Commission, Andhra Pradesh Chief Minister N Chandrababu Naidu at a recent meeting in Amaravati said that progressive states would lose heavily if the 2011 census was taken as the basis for devolution of central funds.

Kerala Finance Minister Thomas Isaac, Andhra Pradesh Finance Minister Yanamala Ramakrishnudu, West Bengal Finance Minister Amit Mitra and others attended the conclave.

Last month, Kerala had hosted a conference of finance ministers of various states to discuss issues of common concern with respect to the commission.

Responding to the concerns, Union Finance Minister Arun Jaitley had said on April 10 that there is no inherent bias or mandate in the ToR which could be construed as discriminatory against the states which have made good progress in population control.

He had said that a needless controversy was being sought to be created that the terms of reference of the Commission were loaded against any particular region of the country.

Pointing to the specific inclusion of reference -- efforts and progress made in moving towards replacement rate of population growth -- Jaitley had said it recognises the efforts of all the states which have done well in population control.

"This specific ToR would allow the 15th FC to propose a specific incentive scheme to reward the states which have achieved replacement level of population growth, and also, if the 15th FC wishes to do so, to assign appropriate weight to the progress made in population control while allocating resources," Jaitley had stated.