Manmohan Singh: Modi govt should take CMs’ views before changing Finance Commission’s terms of reference 

Former Prime Minister Manmohan Singh on Saturday said the government should have taken chief ministers' views before changing the terms of reference of the 15th Finance Commission, adding that unilateralism is not good for federal policy and cooperative federalism.

Earlier in July, the Centre changed the terms of reference of the 15th Finance Commission and mandated the panel to suggest ways for allocation of non-lapsable funds for defence and internal security.

Speaking at an event, Singh said any change in the panel's terms of reference at the fag-end of its term should have been done in consultation with the states.

"The best course would have been for the Central government that if it wants to tailor the terms of reference, it should be backed by Chief Ministers' Conference, which is now under the auspices of NITI Aayog, otherwise there would be strong feeling that the (Central) government is trying to rob the states of due resource allotment.

"I think that it is not good for the federal polity of our country and cooperative federalism we all swear by these days," Singh said while addressing the 'National Seminar on Additional Terms of Reference of the 15th Finance Commission: Implication for the States'.

"The commission's report goes to the finance ministry and then it goes to the Cabinet and therefore government of the day can take a view that whatever the mandate of the Parliament, the government would abide by that rather than imposing its view unilaterally on the reluctant state commissions," he added.

The government on November 27, 2017 notified the 15th Finance Commission, headed by N K Singh, to suggest the formula for devolution of funds to states by the Centre for five years commencing April 1, 2020, among other issues.

The commission, which has been mandated to use 2011 census data rather than the one of 1971 for resource allocation, was to submit its report by October 30, 2019. The deadline was later extended till November 30, 2019.

"I respectfully request to the authorities to still take this view that they will go by the advice of the Chief Ministers if there is new controversy with regard to additional terms of reference of the commission," the senior Congress leader said.

"I am told once upon a time, the 9th Finance Commission took the view that it will be guided by the Constitutional mandate and will do the fair distribution of taxes, though I don't know that whether this (15th) commission is going to adopt that line of thought. But...internal security as well as defence are subjects which are of great national importance," Singh added.

About the role of the commission, he said, "There are certain basic issues like allocations for health, education and other important subjects, environment protection, where all states have a legitimate interest. What should be done by the government is to evolve a broad national consensus in dealing with all these issues, otherwise there would be bickering and dissatisfaction. This is not good for the federal polity of our country." He was of the view that cooperative federalism demands give and take and therefore it is very important that the Centre should take the initiative to consult states as often as necessary to carry them along.

"It's rather odd for the government to come up with additional terms of reference. Most of the states have already gone to the commission with their requirement and now you impose another terms of reference on the commission, which would complicate its work. That is certainly not good for the federal polity and cooperative federalism that we desire should flourish in the country," he added.