Prime Minister Narendra Modi-led government increased the share of taxes given to states from 32 per cent to 42 per cent after 2015, which naturally led to more funds for states like Tamil Nadu, clarified Amit Malviya, in-charge of BJP’s (Bharatiya Janata Party) National Information & Technology Department on his X handle.
He responded to a post on his X handle of former Finance Minister P. Chidambaram who questioned PM Modi-led government for claiming that Tamil Nadu received more funding but it does not reflect in state’s GDP (gross domestic production).
“Tamil Nadu has received significantly more funding for railway projects during the BJP’s tenure (2014–2024) than it did under the Congress-led UPA’s decade of apathy (2004–2014). His counter? A smug lecture on GDP and absolute numbers, as though that somehow absolves his party of its poor governance record,” Malviya wrote in his post.
Malviya clarified that PM Modi-led government, following the 14th Finance Commission’s recommendations, raised the states’ share of central taxes from 32 per cent to 42 per cent after 2015.
This naturally resulted in a significant increase in funds allocated to states like Tamil Nadu.
He further challenged Chidambaram’s reliance on absolute figures, emphasising that standard economic metrics, such as the Debt-to-GDP ratio, provide a more accurate assessment of financial policies.
“Why does the Congress party obsessively tout debt and other macroeconomic indicators in absolute terms—as though basic economic literacy is optional? Any first-year economics student knows that the Debt-to-GDP ratio is the standard for assessing a country’s debt burden. Is this sheer hypocrisy, or simply proof that your party struggles with the fundamentals of fiscal policy?” he asked.
Citing an analogy, Chidambaram pressed his point. He compared the rise in funding to growing older each year — it doesn’t necessarily mean one becomes proportionally taller or stronger.
He argued that while the numbers for railway projects between 2014 and 2024 might appear larger than those from 2004 to 2014, they don’t necessarily represent a greater share of GDP or government expenditure.
Malviya countered by questioning the Congress party’s approach to economic analysis, suggesting that even a first-year economics student would recognise the importance of the Debt-to-GDP ratio. He accused the party of either hypocrisy or a fundamental lack of understanding of fiscal policy.
Malviya also criticised the Congress’ grasp of economics, likening it to the strategic missteps of its unofficial leader, whose decisions often lead to chaos.
“Perhaps the Congress party’s collective economic IQ mirrors that of its de facto leader—a man whose strategic “brilliance” is better known for turning everything he touches into a fiasco. The same ignorance applies to the Finance Commission—something students are taught in high school and college. It is a constitutional body, independent by design, responsible for determining the tax-sharing formula between the Centre and the States,” Malviya pooh-poohed Chidambaram’s logic.
He highlighted the role on his post that the Finance Commission, an independent constitutional body tasked with determining the tax-sharing formula between the Centre and the States.
Malviya reiterated that PM Modi government’s implementation of the 14th Finance Commission’s recommendations had significantly increased the devolution of funds to states.
He urged Chidambaram to abandon selective assertions, acknowledge these basic facts, and refrain from spreading misinformation.
“It was the Modi government that accepted the 14th Finance Commission’s recommendation to raise the share of states in central taxes from 32% to 42%. Naturally, devolution to the states increased substantially from 2015 onward. So the question remains—why doesn’t Mr. Chidambaram stop being economical in his assertions, grasp these “simple” facts, instead of spreading misinformation?” Malviya asked.
