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Regular-article-logo Saturday, 04 April 2026

DELHI AWARD FOR SHOWMAN NAIDU 

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FROM R.SASANKAN Published 21.09.00, 12:00 AM
New Delhi, Sept. 21 :    New Delhi, Sept. 21:  Performer N. Chandrababu Naidu has got what he wanted with his show of solidarity among states unhappy with the Eleventh Finance Commission recommendations. The commission has created history by suggesting a special fund for the so-called performing states long after the Cabinet endorsed its main report. Sources close to the commission said the fund would have a corpus of Rs 5,000 crore. Naidu's Andhra Pradesh will obviously be one of the beneficiaries along with Gujarat, Maharashtra, Tamil Nadu, Kerala, Karnataka and Goa. Angry at what he thought to be injustice to 'performing' states in the commission's award of revenue-gap grants to financially-weak states, Naidu had convened a meeting of fellow-traveller chief ministers in Delhi to the displeasure of his ally BJP and Prime Minister Atal Behari Vajpayee. The commission, headed by A.M. Khusro, has gone beyond its terms of reference in recommending this fund. Official sources said no other finance commission has taken such a U-turn under political pressure. The sources said Khusro must have been told by the Prime Minister to try and redress Naidu's grievance. The Telugu Desam sustains the government at the Centre with 29 MPs and Naidu has so far succeeded in getting what he wants from Vajpayee using this leverage. Since a fund could not be created only for Andhra, the other states also stand to benefit. Andhra gains even though it is not among the first-rung performers. The commission can make recommendations on its own, going beyond its terms of reference. Usually, this is done in the main report and not after it is submitted. It has been able to do it though, since it was still working on a supplementary report in response to an additional term of reference from the President. The task was to devise a formula to link the release of revenue-gap grants to monitorable fiscal performance. The sources said Khusro met with resistence within the commission in making the recommendation. Amaresh Bagchi, the public finance expert, protested and submitted a dissenting note in the supplementary report. It is, however, possible that the commission was trying to make up for the lapses in the main report. The criticism against the main report was that while calculating the revenue-gap grant, the commission went by data supplied by the states instead of working out the figures on its own. As a result, some states night have been awarded grants higher than their deserved share. This is a criticism the commission found difficult to answer. It had recommended a revenue-gap grant of Rs 35,000 crore to 15 states, including West Bengal, for five years. But the remedy - a Rs 5,000-crore special fund - is seen by experts as worse than the disease, given the political connotations.    
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