Union government has accepted recommendations of the 14th finance commission fc as per its agenda of cooperative federalism. Feb 25, 2015 the recommendations of the finance commission will have a substantial impact on budgetmaking for the centre with a number of departments witnessing big reductions in their allocations. There will be no need for revalidation by the finance department. Dec 02, 20 major recommendations of th finance commission the share of states in the net proceeds of the shareable central taxes should be 32%. The th finance commission headed by former finance secretary vijay kelkar had suggested 32% share for the states in the central revenues, but states have been demanding that the resources should. Major recommendations of 14th finance commission headed by prof. Conundrum of conditionalities article pdf available in economic and political weekly xiv48. The fourteenth finance commission had stepped up the share of. Who is the chairman of th finance commission answers with. Apart from the tax devolution, the thirteenth finance commission hereafter tfc has given a large number of conditional grants linking fiscal performance with. The commission suggested a fiscal deficit target of 3. Thirteenth finance commission economic and political. The thirteenth finance commission was required to look into the revenue impact of the introduction of the goods and services tax.
A trustbased approach towards local governments article pdf available april 2015 with 1,760 reads how we measure reads. The fund shall be released from the respective th finance commission budget head of account from the current financial year budget provision of the state government. Its chief areas of concern are to make recommendations for a range. By accepting the recommendations of the finance commission, the centre also has implicitly endorsed the fiscal deficit target of. What is the role of the finance commission in india and. Sfc on financial devolution devolution to urban local bodies ulbs as per 1 sfc conclusions and recommendations.
What is the role of the finance commission in india and its. Nov 30, 2015 14th finance commission of india the fourteenth finance commission fcxiv was constituted by the president on 2 january 20 to make recommendations for the period 201520. The thirteenth finance commission, interalia, has been mandated to recommend the. Get complete information on twelfth finance commission of. In case, any loss or damage is caused to any person due to hisher treating or interpreting the contents of this blog any part thereof as correct, complete and uptodate statement of law out of ignorance or otherwise, this blog will not be liable in any manner whatsoever for such loss or damage.
The 14th finance commission report has been accepted by the center,the report has been tabled today and it recommended that the center transfer 42% of divisible pool to the states, including taxes and grants the th finance commission had suggested it a 39. The thirteenth finance commission of india was constituted by the president of india under the chairmanship of vijay l. Governance in india by laxmikant e book free download pdf. Governance is very important topic for upsc main exam. Summary of recommendations finances of union and states 1. Performance audit of ulbs on financial and performance reporting i. Tenth and eleventh finance commissions recommendations relating to localbodies tenth finance. Governance in india by laxmikant e book free download pdf 2020 latest edition of indian governance by m laxmikanth is available now, aspirants can download this book from link given below. The recommendations of the finance commission can be grouped under the following three heads 1 division and distribution of taxes and duties of which the main have been union income tax other than agricultural incometax and corporate taxes, central excise duties, additional excise duties and estate duty. Fourteenth finance commission ffc for rural and urban local bodies local bodies grant.
The state government is keen to study the implications of the recommendations of pay revision committee prc in the light of the recommendations of 12th finance commission on the management of state by continuing to use this site you consent to the use of cookies on your device as described in our cookie policy unless you have disabled them. The commission was headed by veteran economist of india, c. The twelfth finance commission tfc under the chairmanship of dr. The thirteenth finance commission decided to provide a notification on th november 2007 apropos the terms of reference from the members that include general public, institutions, and organizations. Finance commissions sfcs, which buttress the functioning. This note presents an overview of the changes to the fiscal architecture in india over the past year, as well as those anticipated in the near future. The share of states in the net proceeds of the shareable central taxes should be 32%. Discuss the recommendations of the 14th finance commission the recommendations of the 14th finance commission are as follows. Nov, 2010 summary of recommendations finances of union and states 1. The government of india, with the approval president of india, has constituted fifteenth finance commission.
In terms of total resources transferred, the commissions recommendations. The contents of this blog cannot be treated or interpreted as a statement of law. The fourteenth finance commission had stepped up the share of states in net central taxes to 42% from 32%. The unspent balance of previous years fund shall also be provided from the current years budget. Guidelines of local bodies with utilisation certificate. Report of finance department, government of haryana. This is the largest ever jump in percentage of devolution. Govt to study 12th finance commission recommendations. The centre has decided to discontinue support to eight centrally sponsored schemes, albeit fewer than the commissions recommendation of 30. Delegation of power to release fund of th finance commission. The th fc was constituted by the president under article 280 of the indian constitution on th november 2007 under dr. Vijay kelker to give recommendations on specified aspects of centre state fiscal relations during 201015.
Government has accepted fcs recommendation to increase the devolution of tax receipts from the centre to the states to 42 percent. The present document first records below in brief the recommendations of the thirteenth finance. Introduction the fourteenth finance commission ffc was constituted by the president on january 2, 20 to give recommendations on specified aspects of centre state fiscal relations during 201520. It was formed to define the financial relations between the central government of india and the individual state governments. Recommendations made by the 14th finance commission of india the major recommendations of 14th finance commission headed by prof. Recommendations of 14th finance commission question. The recommendations for the period from 1st april, 2015 to 31st march, 2020 were presented for. Are the recommendations of the 14th finance commission unanimous.
A sound system of intergovernmental fiscal transfers constitutes the cornerstone of a strong and stable federal polity. This is 10 percentage points higher than the recommendation of th finance commission. The seventh pay commission headed by justice ak mathur on thursday submitted its report to finance minister arun jaitley and has recommended 23% hike in gross salary of central government employees. The finance commission is constituted by the president of india every five years under article 280 of the indian constitution, and lays the framework for the federal transfer of resources for the ensuing fiveyear period. Key recommendations of the 14th finance commission i. Nov 23, 2017 the 14th finance commission was set up on january 2, 20.
Highlights of 14th finance commission report february 2015 ficci economic affairs and research division government accepts 14th finance commission recommendation for tax devolution receipts states share in the net proceeds of union tax revenues increased to. Tables 5 and 6 bring out tihe impact of finance comrmission transfers on the nonplan revenue accounts at the two levels. Facilitydcrf and make suitable recommendations thereon. Keeping above in view, the th finance commission have made recommendations for augmenting the resources of rural local bodies in terms of award of grant based on certain principles. Its report, based on the recommendations of a task force constituted to study the issue, recommends a highly uniform and centralised format that does not adequately recognise a tax reform exercise in a multilevel fiscal system that involves compromises and tradeoffs. Tax devolution and grants to bihar as per the recommendations of thirteenth finance commission rs. The grant have two main components basic grant ii performance grant while all the states will have access to the basic grants for five years, the. The following points highlight the six main recommendations of the tenth finance commission tfc. Review and outcomes the 14th finance commission ffc was constituted on 2nd january, 20 and submitted its report on 15th december, 2014. All you need to know about finance commission the hindu. The twelfth finance commission of india was appointed on 1 november 2002 to make recommendations on the distribution of net proceeds of sharable taxes between union and states. Rangrajan was appointed on november 1, 2002, to make recommendations regarding the distribution between the union and the states of net proceeds of shareable taxes, the principles which should govern the grantsinaid of the revenues of states from the consolidated fund of india, and the measures needed to augment the. The report is believed to contain a dissent note from planning commission member abhijit sen.
Implementation of recommendation of thirteenth finance commission. Set up under article 280 of the constitution, its core responsibility is to evaluate the state of finances of the union and state governments, recommend the sharing of taxes between them, lay down the principles determining the distribution of these taxes among states. Recommendations and implementation offirst state finance commission recommendations of 1. The commission submitted its report on 30 november 2004 and covered the period from 200510.
It is a quasijudicial body set up under article 280 of the indian constitution. The finance commission is mandated by the indian constitution to provide recommendations on. Recommendations of thirteenth finance comission international. The recommendation of thirteenth finance commission for the award period 201015 include, inter alia, release of grantinaid to state. It highlights the fact that there has been a serious deterioration in the fiscal situation of. This book is very good for governance section of upsc syllabus. The first finance commission was established by the president of india in 1951 under article 280of the indian constitution. The tfc recommended that the share of states in the net proceeds of the income tax to be fixed at 77. The states need to address the problem of losses in the power sector in a timebound manner.
It was established under article 280 of the indian constitution by the president of india. Recently, states such as bihar and tamil nadu have said that the recommendations of the 14th finance commission are averse to their interests. The recommendations will be considered by the union cabinet and if approved, it will be implemented with effect from january 1, 2016. The 14th finance commission was set up on january 2, 20. Recommendations of the tenth finance commission tfc. The following points highlight the four main recommendations of the eleventh finance commission. Rajan kumar gupta md nazim khan tanmaya kundu bhaskar md. The thirteenth finance commission submitted its report in.
The 14th finance commission has done away with this. The recommendations for the period from 1st april, 2015 to 31st march, 2020 were presented for discussion on february 24th 2015. Website content managed by department of expenditure,ministry of finance,goi designed, developed and hosted by national informatics centre nic last updated. Recommendations for 14th finance commission given below is a summary list of recommendations which we believe are worthy of consideration for inclusion in the report of the 14th finance commission fc. About finance commission the finance commission of india came into existence in 1951. Headed by former reserve bank of india governor yv reddy, its recommendations cover the period from april 1, 2015 to march 31, 2020. The ministry of finance mof should ensure that the finance accounts fully reflect the collections under cesses and surcharges as per the relevant heads, so that there are no inconsistencies between the amounts released to states in any year and the respective percentage shares in net. Who is the chairman of th finance commission answers.
The standout recommendation of the 14th finance commission ffc is its recommendation that the share of states in the net proceeds of the shareable central taxes should be 42% against 32%. Pdf critically appraising the recommendations of the thirteenth finance commission, this paper points out that despite some tinkering with one of the. The th finance commission has forayed into a number of areas partly. Reddy was appointed the chairman of the commission. New delhi 110016 content owned by finance commisssion of india.
After effecting these transfers, the centres accounit was in deficit in four out of five years during 199095 table 5. It was established in the year 1951, to define the fiscal relationship framework between the centre and the state. The recommendations of the finance commission can be grouped under the following three heads 1 division and distribution of taxes and duties of which the main have been union income tax other than agricultural incometax and corporate taxes, central excise duties, additional excise duties and. The commission submitted its report to the president on 30th december 2009 covering all aspects of its mandate composition. Who is the chairman of th finance commission constituted in 2007 answer this multiple choice objective question and get explanation and result. In pursuance of the provisions of article 280 of the constitution of india, and of the finance commission. So 2 important takeaways from this is that forest cover has been used as a criteria by the 14th finance commission and 14th finance commission departed from th finance commission in that it did not use fiscal discipline as a criteria for horizontal devolution of funds. Y v reddy the share of states in the net proceeds of the shareable central taxes should be 42%. Recommendations of the 14th finance commission the hindu. On 5th december 2014, the 14th finance commission presented its report to the union government. It was formed to define the financial relations between the centre and the state. Report of the th session of the compliance committee iotc. The finance commission is a constitutionally mandated body that is at the centre of fiscal federalism.