South vs Centre: Kerala calls southern meet over money share crisis

State Finance Minister Thomas Isaac has invited finance ministers of all south-India states to discuss how Centre disburses funds to them. This follows Karnataka CM's call for unity over the issue in south India.

File photo of Thomas Isaac.

New Delhi: Kerala has become the latest state to join issue over the proposed changes to the way the Centre disburses funds to the states. Just hours after Karnataka Chief Minister Siddaramaiah appealed to his counterparts in the other southern states to raise the issue, Kerala Finance Minister Thomas Isaac invited the finance ministers of these states for a meeting on the issue.

The meeting is likely to be attended by representatives from the governments of all the southern states, considering they have all at one point or the other expressed grievances with the fact that they earn the bulk of the Centre's tax revenue, but get very little in return.

The meeting, if it does take place, is likely to help bring Tamil Nadu, Kerala, Puducherry, Karnataka, Andhra Pradesh and Telangana on the same page. Maharashtra, Odisha, West Bengal and Punjab are the other states that have been identified by some southern politicians as states that would suffer from the Centre's recommendation to the 15th Finance Commission to use the 2011 census as the basis for devolvement of funds instead of the 1971 census.

Over the past week, the southern states have seen rising levels of concern as well as unity over the Centre's recommendation, which had been made without consulting the southern states.

The opposition to this move had come on the basis that if there is a move away from the 1971 census numbers that are presently being used, it would cause great financial harm to the southern states. This has compounded already existing grievances that the southern states deliver the majority chunk of tax revenues to the Centre, but get substantially less in return. Andhra Pradesh Chief Minister Chandrababu Naidu and Telangana CM Chandrasekhar Rao and Siddarmaiah have all complained that the northern states, especially those in the so-called 'cow belt', get a lot more money from the Centre than they earn in taxes.

Not only finance, if the frame of reference is shifted from 1971 to 2011, the southern states stand to lose seats in the Lok Sabha and Rajya Sabha to the northern states, as the delimitation would be carried out on the new population figures.

The core of this summer of discontent for the south comes from the fact that all of the states in the region have managed to bring population growth to replacement levels. Meanwhile, many of the northern states have made little to no progress on this front since the 1970s. This has meant the population of the northern states has grown faster than that of the southern states, leaving them at a disadvantage when resources are divided on the basis of population.

Also, as Siddarmaiah had complained in a column last week, such a move would make all the efforts of the southern states meaningless and, for all practical purposes, penalise their success in implementing Central policies and directives.

DMK leader MK Stalin had written letters to Prime Minister Narendra Modi and the CMs of 10 states on the issue. This had come just days after he told reporters that he would support any efforts by the southern states to break away from India over this issue.