Date:01/01/2009 URL: http://www.thehindu.com/2009/01/01/stories/2009010154760900.htm

Kerala

Kerala Cabinet approves memo to Finance Commission

Roy Mathew

State to seek higher devolution of funds, financial autonomy

Increase demanded in the share of States in Central taxes from present 30.5 p.c. to 50 p.c.
Central aid sought for sea erosion, water logging

THIRUVANANTHAPURAM: The Kerala Cabinet on Wednesday approved the memorandum to be submitted to the 13th Finance Commission on sharing of taxes between the Centre and States and related terms of reference of the Commission.

The memorandum seeks an increase in the share of States in Central taxes from the present level of 30.5 per cent to 50 per cent along with a reduction in the devolution of funds through Centrally- sponsored schemes. The State wants the Central government not to encroach upon the domain of State governments through Central schemes, Chief Minister V.S. Achuthanandan told journalists after the Cabinet meeting. The number of Central schemes carried out as part of State Plans should be gradually brought down and the funds transferred to States for its projects.

Borrowal limits

The State was also demanding that the borrowal limits for State governments from the open market be increased in steps. Allocations to local self-government institutions should be determined on the basis of population, area, backwardness and degree of decentralisation. Sea erosion, water logging and lightning should be treated as natural calamities eligible for assistance from the Central Calamity Relief Fund. Finance Minister T.M. Thomas Isaac told The Hindu that the memorandum dealt with issues from the broad framework of the joint memorandum submitted by State Finance Ministers to the Commission.