Thirteenth finance commission guidelines department of. Discuss the advantages and disadvantages of the recommendations of the 14th finance commission. Modi government accepts finance commission recommendations full text of pm modis letter to cms the modi government said that that it has taken the recommendations of the 14th finance. A sound system of intergovernmental fiscal transfers constitutes the cornerstone of a strong and stable federal polity. Doc major difference between th and 14 th finance. Devolution to the states significantly went up from 32. Jun 15, 2017 14th finance commission and its recommendations ap economy and 14th fc recommendations appsc group ii mains panchatathi secretary mains study tips click on below link for pdf of the vedio. Previously, the planning commission undertook plan expenditures, but now, with more power in the hands of fc, revolutionary measures to equalise opportunities, bring uniformity in public services and promote labor intensive growth. These recommendations relating to distribution of union taxes and duties and grantsinaid are usually implemented by a. Key recommendations and impact on cooperative federalism. Gk question and answer on indian economy 14th finance commission the finance commission is a constitutional body which is set up to recommend the central government to share the tax collection.
The first finance commissions recommendations were criticised on the grounds that a much smaller importance was given to the sources of collection than what was desired by the economically stronger states. Pdf the 14th finance commission has been hailed as. On 5th december 2014, the 14th finance commission presented its report to the union government. The fourteenth finance commission was constituted by the president under article 280 of the constitution on jan. The recommendations, to be observed for a period of five years, will kick in from april 1, 2020. Empowering gram panchayats in 14th finance commission. The challenges before 15th finance commission are many. This is the largest ever jump in percentage of devolution.
The finance commission would encourage suggestionsviews from all interested organisations and individuals which may be sent by 30th april, 20 in any of the following manner. The 14th finance commission has done away with this. The government of india, with the approval president of india, has constituted fifteenth 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. The fourteenth finance commission ffc union budget.
Misleading to compare devolution suggestions of th and. The states share in the proceeds of the income tax should be. Guidelines for local body grants recommended by the fourteenth. Government accepts 14th finance commission recommendation for. The share of states in the divisible pool of taxes collected by the union has been enhanced to 42% from 32%. Our approach and recommendations on vertical devolution 89. The fourteenth finance commission invites suggestions on issues related to the terms of reference from the members of the general public, institutions and organizations. The 14th finance commissions recommendations ushered in a new era of fiscal federalism in india.
Apr 27, 2020 14th finance commission latest breaking news, pictures, videos, and special reports from the economic times. Here we are sharing some important information about 15th finance commission. Government has accepted fc s recommendation to increase the devolution of tax receipts from the centre to the states to 42 percent. Issue of guidelines for the implementation of recommendation of.
Reddy 14th finance commission holds that tax devolution is the primary route for resource transfer to the state no distinction between plan and nonplan. Revenue deficit to be progressively reduced and eliminated. 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%. The government of india on 24 february 2015 accepted the recommendations of the fourteenth finance commission for increasing share of states in central taxes to 42%,the single largest increase ever recommended. In a significant departure from earlier finance commissions, the 14th finance commission has removed the distinction between plan and nonplan expenditure to estimate the quantum of transfer to states. 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.
Since 1951, eight finance commissions have so far been appointed. Public notice issued by 14th finance commission wbxpress. This is the most important task of any finance commission, as the share of states in the net proceeds of union taxes is the. Article 275 grant in aid of revenues grantinaidstatutory grantsnonplan grants are to. Jp nadda lauds pm, fm on accepting 14th finance commission recommendations the acceptance of the recommendations of 14th finance commission is the culmination of these efforts which would have a long last ng positive impact on the states finances, nadda said. 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. Recommendations of 14th finance commission question. This is 10 percentage points higher than the recommendation of th finance commission. 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. Department of expenditure comes under ministry of finance.
Discuss the recommendations of the 14th finance commission the recommendations of the 14th finance commission are as follows. 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. Read more about misleading to compare devolution suggestions of th and 14th commissions. Reddy the government announced the constitution of the 14th finance commission under the chairmanship of former rbi governor y. 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. May 21, 2018 the terms of reference of the 15 th finance commission raises questions about constitutional propriety which goes beyond the concern of population data.
Why 15th finance commission should provide states greater. The commission shall make recommendations regarding the sharing of union taxes, principles governing grantsinaid to states and transfer of resources to local. In the case of the 14th finance commission, that was 25%. Recommendations 14th finance commission headed by former rbi governor y. States share in the net proceeds of union tax revenues increased to 42% from 32% earlier. The fifteenth finance commission xvfc or 15fc is an indian finance commission constituted in november 2017 and is to give recommendations for devolution of taxes and other fiscal matters for five fiscal years, commencing 1 april 2020.
Govinda rao, abhijit sen, sudipto mundle, and an jha. This along with others was completely accepted by the central government, thereby generating a positive momentum towards cooperative federalism. Are the recommendations of the 14th finance commission unanimous. Know new recommendations were made enforceable by the 14th finance commission of india in february 2015. What is the force of the commissions recommendations. Key recommendations of the 14th finance commission i. The recommendations of the commission entered force on april 2015. The contentious issues in the terms of reference are asking the commission. The twelfth finance commission tfc was appointed by president on 1st november 2002 under the chairmanship of dr.
Government has accepted fcs recommendation to increase the devolution of tax receipts from the centre to the states to 42 percent. Its main work is to give recommendations on distribution of central tax revenues between the union and the states. Highlights of 14th finance commission report government. The thirteenth finance commission was required to look into the revenue impact of the introduction of the goods and services tax.
The constitution does not make the recommendations of the finance commission binding on the government of the day. Recommendations of the 14th finance commission the hindu. The president of india appointed a finance commission on 1st december, 1951. 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. Nov 28, 2019 the government on sunday said it has released over rs 37,420 crore to states for 201516 as the first instalment of devolution as per the 14th finance commission recommendations, with uttar. 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. To examine whether revenue deficit grants be provided at all.
The accepted recommendations are for the fiveyear period 201516 to 201920. Local bodies during the state visits of the finance commission 157 163 i. Performance audit of ulbs on financial and performance reporting i. Thirteenth finance commission economic and political. The fourteenth finance commission of india was a finance commission constituted on 2 january 20. Singh, with its fulltime members being ajay narayan jha, ashok lahiri. Tax devolution the most widely reported recommendation of the 14th fc is to increase vertical devolution. Union government has accepted recommendations of the 14th finance commission fc as per its agenda of cooperative federalism. All you need to know about finance commission the hindu. First of all, the rise in devolution to states in 201516 appeared to be a sharp jump because 201415the year before the 14th finance commission recommendations took. Government accepts 14th finance commission recommendation for tax devolution. Earlier, this fund was allotted to district, block and village panchayat, but, now, as per the 14th finance commissions recommendation, the amount goes to gram panchayats only.
Guidelines for local body grants recommended by the fourteenth finance commission. Recently, states such as bihar and tamil nadu have said that the recommendations of the 14th finance commission are averse to their interests. The 14th fc has continued with the thfc recommendation of making these. 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. The thirteenth finance commission submitted its report in. Summary of the recommendations of the tfc are placed at annexii. Southern states have raised objections over the directive to use popu. Fourteenth finance commission ffc for rural and urban local bodies local bodies grant. The tfc recommended that the share of states in the net proceeds of the income tax to be fixed at 77. Review and outcomes the 14th finance commission ffc was constituted on 2nd january, 20 and submitted its report on 15th december, 2014. The finance commission is a constitutionally mandated body that is at the centre of fiscal federalism. Fourteenth finance commission report maps of india. However, credit goes to the present government at the centre to implement the 14th finance commission recommendations, arming the panchayats with this actual rights. Recommendations of the tenth finance commission tfc.
Fourteenth finance commission fcxiv with regard to local bodies. Today we are giving you the complete list of finance commissions and their chairmans heads. The fourteenth finance commission report will go a long way towards promoting cooperative federalism. The commissions chairman was former reserve bank of india governor y. Main recommendation of the twelfth finance commission. This is higher than the recommended allocation of 2. 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. The presidential terms of reference tor of the fifteenth finance commission have raised questions. Y v reddy the share of states in the net proceeds of the shareable central taxes should be 42%. The terms of reference of the commission are at annexi. The fourteenth finance commission will come into power in the year 2015. However, there is a strong precedent that governments generally go by the suggestions as far as sharing of revenues is concerned. The difference between th and 14th finance commission and its impact on orissa from a view point. It is also evident from figure 1 that bihars transfer dependence has not declined in recent years.
The government on monday constituted the 15th finance commission under the chairmanship of former expenditure and revenue secretary nk singh with a task to recommend principles of devolution of. Major recommendations of 14th finance commission headed by prof. Critically appraising the recommendations of the thirteenth finance commission, this paper points out that despite some. It is in pursuance of clause 1 of article 280 of the constitution, read with the provisions of the finance commission miscellaneous provisions act, 1951e. Download 15th finance commission report pdf for upsc 2020. List of finance commissions and their chairmans heads. The report is believed to contain a dissent note from planning commission member abhijit sen. F riends, weve already gave a detailed overview of 14th finance commission you can read that post from here. The following were the important recommendations of this commission. Fourteenth finance commission finance commission, india. The recommendations for the period from 1st april, 2015 to 31st march, 2020 were.
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. The recommendations of the four teenth finance commission ffc. The 15th finance commission is the first finance commission set up after the abolishment of the planning commission. Apr 27, 2015 the 14th finance commission fc hasbeen hailed for its pathbreaking recommendations in cooperative federalism 1 with a significant increase in the share of state governments in the. Terming the 14th finance commission recommendations as a watershed in the history of indian federalism, chief economic advisor cea arvind subramanian has said the suggestions will provide more. Essential recommendations of finance commission of india.
Gk, general studies, optional notes for upsc, ias, banking, civil services. The 14th finance commission had increased the share of states in net taxes to 42% from the previous level of 32%. States share in the net proceeds of union tax revenues. The following points highlight the four main recommendations of the eleventh finance commission. The 14th finance commission had importantly recommended for greater devolution by increasing state share from 32% to 42% in the central tax kitty. Nov 30, 2015 recommendations made by the 14th finance commission of india the major recommendations of 14th finance commission headed by prof. It highlights the fact that there has been a serious deterioration in the fiscal situation of. The 14th finance commission provides assistance to some states and is a deterrent for others.