'Those Were The Days': 15th Finance Commission Reminisces Travels, Challenges

Video Producer: Muskan Singh

Video Editor: Purnendu Pritam

“The concept of ‘BIMARU’ states has outlived its utility,” said NK Singh, chairperson of the 15th Finance Commission, on 22 December at the launch of the book, ‘Those Were The Days’ in Delhi.

The book, written by members of the 15th Finance Commission and compiled by member Dr Ashok Lahiri, talks about their travels through the length and breadth of India, as they were preparing the report. 

The term ‘BIMARU’ states was an acronym used for Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh, that have traditionally performed low on several development indices.

“On some parameters, Bihar and Madhya Pradesh have made significant headway in terms of population control. Bihar has come tantalisingly close to the Total Fertility Rate (TFR), and in terms of infant mortality, institutional delivery, Bihar has made enormous strides. Hence, we need to look at each state individually," said Singh.   

During the discussion, which also saw current and former finance ministers as panelists, Singh asked the representatives of the states on ways in which the “trust between the Central government and states can be fortified.”

Bihar -- A Revenue Surplus State

Sushil Modi, the former Finance Minister of Bihar, said that they have been able to make Bihar a revenue surplus state, thanks to the assessment of the 12th Finance Commission. 

“We are not experts or economists, we are political activists. Yet, we were able to bring Bihar out of debt and make it a revenue surplus state for 15 years in a row. But, as a result, we were denied the revenue deficit grants.”

Sushil Modi, Former Finance Minister, Bihar

“Compare that with say, Andhra Pradesh, which got a revenue deficit grant of Rs 30,000 crore,” he added.

Modi asserted that southern states, which are better governed as they were able to bring the total fertility rate down and control their population, are getting more revenue deficit grants as compared to states like Bihar, where the total fertility rate is high. 

Distribution of Funds: A Challenge for Finance Commission

Meanwhile, Tamil Nadu Finance Minister Dr. Palanivel Thiaga Rajan, popularly known as PTR, said that the proportion of grants given by the Centre to the southern state has consistently fallen. 

“Tamil Nadu’s share of the population at one time used to be 7.5 percent, of the GDP used to be 7.5 percent, of the taxes devolved by the central government used to be 7.5 percent. Over four-five Finance Commissions, the population has dropped to six percent, the GDP has gone up to 10 percent and the share of taxes has gone down to four percent. This is why we had made the observation that Finance Commissions come and go but our share goes down,” PTR said.

To this, Chairperson NK Singh retorted, "Should states that have done well on population be penalised at the expense of states that have been profligate?"

Meanwhile, former Finance Minister of Punjab, Manpreet Singh Badal attributed the destabilisation of Punjab to Pakistan. “Very few people know that once Dhaka fell and Bangladesh was created, it became the state policy of Pakistan to take revenge... To give a thousand cuts to India, and those thousand cuts will be in Punjab.”

However, Punjab is hopeful, Badal said, reciting a poem by Faiz Ahmed Faiz.

The discussion also involved members of the Finance Commission regaling the audience with their travels across India, the people they met, the food they ate and the landscapes they saw.

Lahiri said, “The Finance Commission is not just about punching numbers. It is about interaction with the people.”