16th Finance Commission: Kerala set to host Finance Ministers’ Conclave in Thiruvananthapuram

Thiruvananthapuram conclave to address Centre-State financial issues, led by Kerala Finance Minister, with participation from southern States and Punjab

Centre-State financial relations, grievances regarding cuts in allocation and the need for a united front to secure a fair share in the 16th Finance Commission will take centre stage in Thiruvananthapuram on Thursday (September 12, 2024) at a one-day conclave to be attended by Finance Ministers of four southern States and Punjab.

Kerala, which is organising the Finance Ministers’ Conclave, sees it as a platform for Opposition-ruled States to thrash out their positions with respect to the 16th Finance Commission headed by Arvind Panagariya. Telangana Deputy Chief Minister and Finance Minister Mallu Bhatti Vikramarka, Karnataka Revenue Minister Krishna Byre Gowda, Punjab Finance Minister Harpal Singh Cheema, Tamil Nadu Finance Minister Thangam Thennarasu and Kerala Finance Minister K.N. Balagopal will be attending the conference along with leading economists and planning experts.

Kerala Chief Minister Pinarayi Vijayan is scheduled to open the conclave at Hotel Hyatt Regency here at 10 a.m. Leader of Opposition V.D. Satheesan also will address the conclave.

Mr. Balagopal said the conclave is being organised against the backdrop of the Union government’s stands that contradict the spirit of fiscal federalism and sustainable centre-State relations.

Preserving the sanctity of tax devolution, the Centre’s increasing reliance on cesses, Finance Commission norms for the division of resources, and surcharges and States’ grievances concerning borrowing limits are expected to come up in the discussions on Thursday.

It may be recalled that Kerala, accusing the Centre of placing a financial embargo on it, has approached the Supreme Court against the borrowing constraints imposed on it.

Mr. Balagopal said a “vertical and horizontal” imbalance persists in the transfer of resources. “Kerala is taking the lead to organise this conclave in the context of the challenges that fiscal federalism faces today. Ideation with regard to presenting the development and financial issues faced by the States before the 16th Finance Commission is the primary aim of the conclave. A report of the 15th Finance Commission has observed that States shouldered 62.4% of the aggregate expenditure, while 63% of the revenues goes to the Centre. States should receive at least 50%,” Mr. Balagopal said.