Pdf critically appraising the recommendations of the thirteenth finance commission, this paper points out that despite some tinkering with one of the. One of the core tasks of a finance commission as stipulated in article 280 3 a of the constitution is to make recommendations regarding the distribution between the union and the states of the net proceeds of taxes. Implications of th finance commissions recommendations article pdf available in economic and political weekly 4548. Recommendations of the 14th finance commission the hindu. Implications of th finance commissions recommendations article pdf available in economic and political weekly 4548 february 2011 with 99 reads. Union government has accepted recommendations of the 14th finance commission fc as per its agenda of cooperative federalism. This is the most important task of any finance commission, as the share of states in the net proceeds of union taxes is the. The share of states in the net proceeds of the shareable central taxes should be 32%. Data submitted by state governments to thirteenth finance. 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. Article 280 of the constitution of india requires the constitution of a finance commission every five years, or earlier. The report of the thirteenth finance commission conundrum in conditionalities introduction the report of the th finance commission, is perhaps more comprehensive than any other report in its analysis of fiscal developments in the country and recommendations on issues not only relevant to intergovernmental finance, but also a.
The report of the thirteenth finance commission conundrum in. Sep 19, 2017 under article 280 c, the president may refer any matter to the finance commission in the interest of sound finance. The finance commission, set up in 1951 under article 280 of the constitution, basically decides how revenue has to be distributed between the centre and. Challenges for fiscal policy in india francesco giavazzi y april 14, 2011 1 introduction and summary indias th finance commission hereafter fc with no explicit reference to its number was asked by the countrys president to make recommendations in two main areas1.
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. Since 1951, eight finance commissions have so far been appointed. The states share in the proceeds of the income tax should be. The commission was headed by veteran economist of india, c.
Fcxiii commissioned 29 external and two inhouse studies. Finance commission of india 1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th 11th 12th. This is the largest ever jump in percentage of devolution. The commission submitted its report on 30 november 2004 and covered the period from 200510. Terms of reference the commission was asked to make recommendations on the following matters. When was the first commission constituted and how many commissions have been constituted so far. The thirteenth finance commission, interalia, has been mandated to recommend the share. 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. Critically appraising the recommendations of the thirteenth finance commission, this paper points out that despite some. The 14th finance commission has done away with this. List of finance commissions and their heads list of finance commissions and their heads is an important static gk topic for mba, bank po and other competitive exams. Recommendations of thirteenth finance commission international.
Government has accepted fcs recommendation to increase the devolution of tax receipts from the centre to the states to 42 percent. The thirteenth finance commission submitted its report in parliament on february 25, 2010. The president of india appointed a finance commission on 1st december, 1951. 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. Essential recommendations of finance commission of india. Therefore, let us go through the important points about 14th finance commission. The accepted recommendations are for the fiveyear period 201516 to 201920. The following were the important recommendations of this commission. Finance commission tax devolution formula for inter. Report of the th finance commission 2010 2015 the government must cut its fiscal deficit to 3% of the gdp by the end of fiscal year 2014 and eliminate its revenue deficit in 201415.
Randeepguleria, director, aiims, new delhi and shall consist of eminent experts in health sector from across the country. Facilitydcrf and make suitable recommendations thereon. The 14th finance commission has recommended a record 10% increase in the states share in the union taxes to 42% as compared to the th. A sound system of intergovernmental fiscal transfers constitutes the cornerstone of a strong and stable federal polity. The fourteenth finance commission report will go a long way towards promoting cooperative federalism. Expenditure for the th finance commission period 201011 to 201415. 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 42% from 32% earlier. Recommendations of the tenth finance commission tfc. 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.
This is 10 percentage points higher than the recommendation of th finance commission. 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. Here we are sharing some important information about 15th finance commission. The fourteenth finance commission was constituted by the president under article 280 of the constitution on jan. Thirteenth finance commission economic and political.
Discuss the main recommendations of 14th finance commission. The distribution of taxes collected between the centre. The thirteenth finance commission of india was constituted by the president of india under the chairmanship of vijay l. Thirteenth finance commission economic and political weekly. Y v reddy the share of states in the net proceeds of the shareable central taxes should be 42%. Nov 27, 2010 the thirteenth finance commission was required to look into the revenue impact of the introduction of the goods and services tax. The tfc recommended that the share of states in the net proceeds of the income tax to be fixed at 77. The th finance commission has forayed into a number of areas partly. Revenue deficit to be progressively reduced and eliminated, followed by revenue surplus by 202014. Grant recommended by th finance commission extent of utilization of earlier instalments to determine eligibility for release of subsequent instalments o. 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. Key recommendations of the 14th finance commission i. Apr 17, 2018 the 14th finance commission has recommended a record 10% increase in the states share in the union taxes to 42% as compared to the th finance commission. The first finance commission was constituted vide presidential order dated 22.
Indian economy and issues relating to planning model answer. The finance commission is mandated by the indian constitution to provide recommendations on. Report of the thirteenth finance commission 20102015. In terms of total resources transferred, the commissions recommendations. Reddy 14th finance commission holds that tax devolution is the primary route for resource transfer to. Major recommendations of 14th finance commission headed by prof. Article 275 grant in aid of revenues grantinaidstatutory grantsnonplan grants are to. Fourteenth finance commission ffc for rural and urban local bodies local bodies grant. Mar 29, 2018 the finance commission, set up in 1951 under article 280 of the constitution, basically decides how revenue has to be distributed between the centre and the states. It is also evident from figure 1 that bihars transfer dependence has not declined in recent years. You can expect at least 1 to 2 questions from list of finance commission and their head in any competitive exams.
The following points highlight the four main recommendations of the eleventh finance commission. The finance commission is a constitutional body that is setup under the article 280 of the constitution of india by the president every five years. Till now the president of india has asked the commission to make recommendations on the principles governing distribution of the net proceeds of estate duty in respect of property tax on railway fare and excise duties on. It highlights the fact that there has been a serious deterioration in the fiscal situation of. On 5th december 2014, the 14th finance commission presented its report to the union government. It is definitely going to appear in upcoming interviews and examinations. Thirteenth finance commission guidelines department of.
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