For the first time ever, the terms of reference for a finance commission included a number of вЂњ proposing measurable performance-based incentives for StatesвЂќ. Since most readers donвЂ™t bother to go and actually check the terms of 15th FC, they will automatically believe that there is no provision for rewarding the performing states. It also told us that UP would have gained ~35000 crores, Bihar ~32000 crores etc.ДЄnd hereвЂ™s where the chicanery of websites of The Wire, and the insincerity of bureaucrats (covered in Eenadu) come to the fore. The table told us that AP would have lost ~24,000 crores, TN ~22,000 crores, Kerala and WB ~20,000 crores each and so on. In fact the eenadu article even gave us the losses that the performing states would have entailed, if the 2011 census was considered for the 14thFC (whose period is 2015 вЂ“ 2020). What about the other key argument вЂ“ should performing states be penalized?Д«oth the articles in The Wire and in Eenadu have suggested that the performing states of South India are at a heavy loss. For example, this table picked up from a government website confirms such findings for 13th and 14th FC The devolution formula has always included other aspects, outside of population. It turns out that my assumption is wrong. Bhaskar, Secretary of 13th Finance Commission told in his interview - вЂњ The 14thFC gave 17.5% weightage to the Census 1971 dataвЂќ.ДЄt first look, these numbers itself were very perplexing! Because the automatic assumption is that the remaining percentage is from the other census. So is it fair enough to assume that the remaining 90% weightage was from the Census 1971 data? gave a weightage of 10% for Census 2011 dataвЂќ. The Wire tells us that вЂњ вЂ¦ the 14th Finance CommissionвЂ¦. Was any weightage given to 2011 census in 14th FC? I, for one, fail to understand this penchant to dramatize non-existing problems? The font is the same across the entire document! The population criteria is placed at a similar place, as was done in all previous FC references. The Wire says that the change of criteria from 1971 to 2011 census вЂњ was done with such little fanfare and in fonts so tiny that it made one wonder if those who sought it wanted no one to take notice.вЂќДЇonts so tiny? Such little fanfare? Please take a look at the Gazette notification. From the 7th FC (set up in 1977) onwards till the 14th FC (2015 to 2020), every single FC used 1971 data! Imagine using 1971 data for distribution model in 2015 вЂ“ what explains this status quo for so many years? IsnвЂ™t it surprising that we used 1971 census data even 40 years later? Up until the 6th finance commission, no specific guideline was given on which census data to be used. This is reconfirmed when we visit the Finance Commission website and look at the terms of reference of all the finance commissions. вЂњ From the 7th FC to the 14th FC, all of them used the 1971 census data as referenceвЂќ. While reading the article in Eenadu, I was perplexed when Shri Bhaskar made the following statement:

The article in Eenadu tells us that AP, TN, Kerala, West Bengal, Odisha and 7 other states stand to вЂњloseвЂќ money, whilst UP, Bihar, Rajasthan, Madhya Pradesh, J&K and the remaining states stand to вЂњgainвЂќ money.

The article in Wire claims that Tamil Nadu and Kerala are at a massive loss because of this. By the same logic, states that have not bothered about implementing these measures will immensely gain.The Wire, and subsequent experts have argued that this is grossly unfair because this basically means all those states that have made progress on controlling population and increasing tax productivity will be at a loss.The terms of reference of the 15thFinance Commission (FC) tell us that вЂњ The Commission shall use the population data of 2011 while making its recommendations.вЂќ.What is the crux of the argument these folks are making?

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