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Krishna flays Finance Panel recommendations

Our Bureau

BANGALORE, Aug. 13

THE Chief Minister, Mr. S.M. Krishna, has requested a meeting of the NDC or Interstate Council to discuss the scope for debt relief to the State in a letter to the Prime Minister, Mr. Atal Bihari Vajpayee.

Karnataka has got a raw deal from the 11th Finance Commission, he said. The State was shocked and disappointed by the recommendations of the Commission, which did not give weightage to careful management of the State's finances and, instead, gave tax dev olution as compensation to States that are not managing their finances properly.

``The 11th Finance Commission has given us 4.93 per cent share in the total devolution, whereas it had been 5.33 per cent by the 10th Finance Commission. If the TFC formula for devolution were adopted, we would have got an additional Rs. 1,165.78 crores over a period of five years. The reason for this reduced share is the weightage given to per capita GSDP criteria and less weightage to tax effort. This means, States which have healthy growth rate of GSDP and contribute to the economy of the country, wi ll get lesser allocation,'' Mr. Krishna says.

He said the State's finances had come under strain following the implementation of the Fifth Pay Commission recommendations. There is no appreciable debt relief grant to States such as Karnataka. The 11th Finance Commission formula will not yield debt re lief to Karnataka as the State's revenue expenditure has increased enormously due to the wage revision without a corresponding increase in revenue receipts, he said.