Chennai, In an interactive session during Tamil Nadu’s Global Investors Meet, former Chief Economic Advisor Arvind Subramanian suggested that southern states should receive a slightly larger portion of funds from the Union government to mitigate potential disaffection arising from the impending delimitation exercise in 2026. The exercise aims to redefine boundaries for assembly and parliamentary constituencies based on population, scheduled after the decadal census in 2021.
Subramanian emphasized the need for a new social contract, stating that if political representation shifts in favor of more populous states in northern India, it could lead to dissatisfaction among southern states, which contribute significantly fiscally. He proposed that states like Tamil Nadu retain a slightly larger portion of resources from the Centre to address this concern.
Former RBI governor Raghuram Rajan, part of the expert cohort advising the Tamil Nadu government, echoed Subramanian’s sentiments. Rajan advocated for increased devolution of funds to states investing in substantial infrastructure and social projects, asserting that India’s governance should extend beyond New Delhi.
The experts anticipate that the 16th Finance Commission will play a crucial role in addressing these concerns and fostering a balanced fiscal relationship between the central and state governments.
