Hyderabad, Jan 30 (PTI) Amid calls from some southern states favouring higher population to address disparities in Central funds, former RBI Governor D Subbarao on Thursday argued that population growth is not the solution.

Delivering "3rd BPR Vithal Memorial Lecture-India’s Fiscal Federalism-Quo Vadis?" here, Subbarao said the BJP, which had earlier called freebies "revadi culture" is now competing with Aam Aadmi Party in offering schemes in the Delhi Assembly poll campaigns.

He, however, said in a poor country where millions struggle for daily life, it is even mandatory for the government to help people.

On some states offering free government bus rides to women free of cost, the former RBI chief opined there is no evidence that it is the best way to help them.

"I worked in the government for 50 years. When I first joined the service, our biggest priority was population control, family planning and we believed that the population growth was undoing all the development. But I never saw that we will see a day when political leaders will say that we must increase our population," Subbarao said.

"Evidently the subtext of the message is that some states which have done well in population control are losing out on Central transfers. But I don’t believe that increasing the population is the solution, because India is one country. We still have a population problem at the aggregate level," he further said.

Expressing concerns about being penalised for achieving better growth and controlling its population, Kerala recently demanded an increase in its share of Central taxes from the current 41 per cent to 50 per cent and a reduction in the per capita-based share for states from the divisible pool, from 45 per cent to 30 per cent.

Requesting allocations, based on population ratios, should be disbursed promptly without bias, Telangana in the recent pre-budget meeting said it has been underfunded with respect to Centrally sponsored schemes.

Andhra Pradesh Chief Minister N Chandrababu Naidu and his Tamil Nadu counterpart M K Stalin had spoken in favour of having more children in recent times.

While Naidu flagged 'ageing population', Stalin said the Lok Sabha delimitation exercise may make people think about raising "16 children", while referring to a Tamil adage.

Subbarao opined that the Central government needed to have a mechanism to control freebies being offered by political parties beyond acceptable limits.

"The biggest disappointment on freebies is that three years ago, the Prime Minister made a statement that there must be restraint on freebies. Two months after that, in the UP elections, the BJP went on giving freebies. And today, they are competing head to head and toe to toe with AAP on freebies," he said.

He said governments can not borrow and give away money for consumption as freebies.

Subbarao said a healthy cooperation between the Centre and states is also important for "Viksit Bharat". PTI GDK KH

Population-based allocation affects fiscal transfers and should not incentivise higher births, warns former central banker. Former central bank governor D. Subbarao argues that encouraging higher population to secure larger shares of Central transfers is counterproductive because India still faces aggregate population challenges. He criticises political incentives that reward larger families and states' demands to recalibrate tax-sharing formulas, while urging the Centre to curb excessive freebies financed through borrowing and to promote Centre-state cooperation for disciplined public expenditure.