Reward progress, don't penalise: Krishna Byre Gowda

'Finance panel's 2.1 replacement fertility rate will hit progressive states'

Agriculture Minister Krishna Byre Gowda on Tuesday said the Terms of Reference (ToR) of the 15th Finance Commission disincentivised all progressive states and curtailed the states' rights on matters like the implementation of welfare schemes.

Gowda was speaking at a conclave of finance ministers and secretaries of southern states and the union territory of Puducherry, hosted by the Kerala government here. On ToR guidelines recommending incentives to states for reducing their replacement level fertility rate to 2.1, the minister said the move would hit states which had already brought down their population growth rates. The guidelines take the 2011 population census as the basis for tax devolution, and not the 1971 census, setting off opposition in the south.

"The states that attain the 2.1 replacement fertility rate are set to be incentivised (as per the ToR). It means that all progressive states which already did the national duty to bring the population down over 30 years will lose out. They won't be eligible to receive the incentive either. It's a double whammy," he said.

Gowda, who represents Karnataka in the Goods and Services Tax Council, took objection to the proposed disincentives for states that undertake populist schemes. He said the ToR described "populist" in highly subjective terms. "Schemes ahead of their times could cause a misunderstanding that should not be used as a reason to disincentivise. When Karnataka launched the mid-day meal scheme in 2001-02, it was termed populist, but it later became a national flagship programme," he said.

The minister called for a model that links incentives to achievements and not central flagship programmes. He said states that already achieved set goals on their own should not be penalised for being ahead. "Progress should not be penalised, it should be rewarded," he said.

Gowda was ready to give "the benefit of the doubt" to the BJP-led Centre and said the present situation could be an unintended consequence, but called for amended ToR and consultations involving the affected states. "We need strong states which are growth engines. A stronger Karnataka means a stronger India," he said.

Ensuring a balance between equity and efficiency was a tough ask, but the Commission could still ensure that interests of all states were protected. "We don't have to create winners and losers when we can create a win-win situation for all," he said.