K.N. Balagopal Urges 16th Finance Commission for fair fiscal allocation

Thiruvananthapuram: The 16th Finance Commission, chaired by Prof. Arvind Panagariya, began its official visit to Kerala today with a warm welcome led by the Hon'ble Finance Minister of Kerala, K.N. Balagopal.
The event marked an important platform for the state to present its memorandum, addressing fiscal concerns and development priorities.
In his opening remarks, Balagopal set the tone for the discussions by emphasizing the role of the Finance Commission in fostering the federal fiscal framework of the country.
"It has a constitutionally mandated pre-eminent role in upholding the fiscal system of the country, especially the federal fiscal arrangement of the nation," he said.
Balagopal highlighted Kerala's renowned achievements under the "Kerala model of development," which has drawn national and international accolades.
However, he also acknowledged that the state lags in infrastructure development, particularly in higher education, research, and the knowledge economy. He stressed that Kerala has made consistent efforts to bridge these gaps, despite fiscal constraints.
Referring to the decline in Kerala's share of central devolution from the 10th to the 15th Finance Commission, Balagopal stated, "From the 10th FC onwards, the state share in total devolution started getting cut down from 3.88% in the 10th FC to 1.92% in the 15th FC."
He attributed this trend to the use of population and income distance criteria, which he argued penalized Kerala's exemplary performance in areas such as population control and income growth.
"Kerala was ahead of most states in implementing the national population policy. The state got penalized for this achievement. Another reason was the use of the income distance criterion. Kerala's achievement in raising per capita income has turned out to be a reason for reducing its share in devolution," he said.
Balagopal also underscored the importance of empowering local governments, affirming, "Empowering the Local Governments will help us strengthen both diversity and unity of the nation."
Despite fiscal shocks from environmental disasters, the pandemic, and the cessation of GST compensation, Balagopal expressed hope for an upward revision in Kerala's share.
He also urged the Commission to reward states like Kerala for their success in decentralization and social welfare.
He said, "Kerala is a model state in the area of decentralisation. The state is way ahead of the rest of the country in devolution of functions, functionaries, and funds to the local governments. It is important that instead of penalising, the success of devolution is adequately rewarded. If so, it will appropriately incentivise other states to take the constitutional goal of decentralisation more seriously."
The session concluded with Balagopal extending a warm welcome to all Commission members and dignitaries present, expressing confidence that the 16th Finance Commission would fulfil its constitutional responsibility in the most commendable manner.