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Finance panel needs more transparency: Isaac

KOCHI: Finance Minister T.M. Thomas Isaac has called for more transparency in the functioning of the Eleventh Finance Commission. He was addressing a press conference here on Saturday to announce the Amnesty Scheme for settling long-pending sales tax cases in the State.

Moves like reducing the project share for States amount to interfering with the financial autonomy of State governments, Dr. Isaac said. He said the functioning of the Finance Commission, which is a constitutional body, had been adversely affected by the policy decisions taken by the Union government. Only 0.1-0.2 per cent of the national income was allotted to the local self-government bodies, whereas these bodies spent 1.71 per cent of the income.

In developing nations, this would come to 12.75 per cent. Hence the funds allotted to local self-government bodies needed to be revised in tune with the changing times, he said.

Implementation of more Union-funded programmes was adversely affecting the State, as a majority of these programmes were to be implemented by the State government, especially in education and health sectors.

Also, these projects were being drafted according to the criteria used in North Indian States like Bihar. This leads to lesser funds allotted to the State. Kerala was much advanced in education and health sectors and the State needed projects aimed at sustaining this advancement and improving it.

At present, the Union-aided projects do not cater to that need, the Minister said.

A national seminar would be held in Thiruvananthapuram on May 6 and 7 to initiate talks between the Union and the State governments on financial sector.

Financial and planning experts would participate in the seminar, which would be held after the conference of State Finance Ministers on May 5, Dr. Isaac said.

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