The first finance commission was formed on 22 november, 1951. Guideline for use of incentive amount in state finance commission s. Vitta ayoga was established by the president of india in 1951 under article 280 of the indian constitution. Government of india law commission of india report no. 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. As evident from its report, the fourteenth finance commission ffc has made a. The fourteenth finance commission of india was a finance commission constituted on 2 january 20. This along with others was completely accepted by the central government, thereby generating a positive momentum towards cooperative federalism. Some of the other factors that the commission takes into account are per capita income, area, and fiscal discipline. 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. Explanatory memorandum as to the action taken on the recommendations made by the fifteenth finance commission in its report for financial year 2020. The 14th finance commission was constituted in january 2014. Since the institution of the first finance commission, stack.
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. Singh, members sshri ajay narayan jha, ashok lahiri, ramesh chand, anoop singh and secretary shri arvind mehta of the commission. Pdf the 14th finance commission has been hailed as. The thirteenth finance commission was required to look into the revenue impact of the introduction of the goods and services tax. Finance commission in its report has given their views on the devolution of tax receipts from the centre to the states from 1st april 2015 to 31st march 2020. Area is used as a criterion as a state with larger area has to incur additional administrative costs to. Aiming to increase forest cover of india the 14th finance commission for the first time has recast its fiscal transfer formula, according to it the share of central tax r. Pdf the ability of the finance commission in shaping fiscal federalism often. It assigned 15% weight to the population of a state, down from the 17. The finance commission act of 1951 states the terms of qualification appointment and disqualification and term, digibility and powers of the finance commission. Here we are sharing some important information about 15th finance commission. The 15th finance commission submitted the report for 2020. Encouraging state governments to protect and restore forests. Get ready for upsc civil services preliminary exam 2020 with insights insta 75 days revision plan.
Govinda rao, abhijit sen, sudipto mundle, and an jha. Its main work is to give recommendations on distribution of central tax revenues between the union and the 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. This report would not have been possible without the contribution of a large number of people. Conundrum of conditionalities article pdf available in economic and political weekly xiv48. Key recommendations of the 14th finance commission i. Highlights of 14th finance commission report government. Guidelines for local body grants recommended by the fourteenth finance commission.
Guidelines for the performance grant disbursement in fourteenth finance commission. In this lecture i have covered the 14th finance commission and its recommendations, this is part 1 of the videothis is very important topic for your upsc, state level, ssc, banks and other exams. It was formed to define the financial relations between the central government of india and the individual state governments. Mar 29, 2018 in the case of the 14th finance commission, that was 25%. The 1% decrease is to provide for the newly formed union territories of jammu and kashmir, and ladakh from the resources of the central. Nov 27, 2010 the thirteenth finance commission was required to look into the revenue impact of the introduction of the goods and services tax. May, 2017 the 14th finance commission report has been accepted by the center,the report has been. Website content managed by department of expenditure,ministry of finance,goi designed, developed and hosted by national informatics centre nic last updated. It is also under the ambit of the finance commission to define the financial relations between the union and the states.
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. 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. 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. Macroeconomic policy simulations for the 14th finance. The finance commission is a constitutional body which is established under the article 280 of indian constitution.
The present report is aimed at addressing this scenario that demands a multiprong approach including more sensitive and rational judicial womanpower planning. In the case of the 14th finance commission, that was 25%. The 14th finance commission was setup by the president in january 2014 under the chairmanship of the former rbi governor y v reddy and its other members were sushma nath, m govinda rao, sudipto mundle, abhijit sen. In february 2014, indias 14th finance commission added forest cover to the formula that determines. The finance commission consists of a chairman and four other. Performance grant is to be received from the year 201617. 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. Are you ready for insta 75 days revision plan upsc prelims 2020. Impact of the 14th finance commission and css sharing pattern on. To be sure, the year in which the 14th finance commission was implemented 201415 did see a. On 5th december 2014, the 14th finance commission presented its report to the union government. The fourteenth finance commission ffc union budget. Under article 280 of the constitution, the president of india is required to constitute a finance commission at an interval of five years or earlier.
Recommendations 14th finance commission headed by former rbi governor y. The finance commission is a constitutionally mandated body that is at the centre of fiscal federalism. Fourteen 14th finance commission economics study material. The 15th finance commission has been mandated to use data from the 2011 census. Fourteenth finance commission ffc for rural and urban local bodies local bodies grant. The 14 th finance commission of india is constituted in the chairmanship of the former rbi governor mr. Finance commission, the hpec report on indian urban infrastructure and services, and an adbsponsored study footnoted here, shows that 4 see government of india. Increase in untied transfers and a reduction in grants as a result of the fourteenth finance. The commission is headed by former reserve bank of india rbi governor y v reddy. Gk, general studies, optional notes for upsc, ias, banking, civil services. Performance audit of ulbs on financial and performance reporting i. Singh, with its fulltime members being ajay narayan jha, ashok lahiri.
Macroeconomic policy simulations for the 14 th finance commission by nipfp team 1. The 15th finance commission submitted the report of the commission for the financial year 202021 for further action. Reddy 14th finance commission holds that tax devolution is the primary route for resource transfer to. The 14 th finance commission has submitted its report to the president pranab mukherjee. Performance grant is to be received for the period of 5 years during the year 201520. 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. Commissions chairman was former rbi governor y v reddy and its members were sushma nath, m. Ministry of finance s letter dated 3rd july, 20 regarding delegation of powers of department of the central government to the fourteenth finance commission 275 annex 1. The 15 th finance commission was constituted by the president of india in november 2017, under the chairmanship of nk singh. The fourteenth finance commission report will go a long way towards promoting cooperative federalism. Article 275 grant in aid of revenues grantinaidstatutory grantsnonplan grants are to.
Thirteenth finance commission economic and political. Major recommendations of th finance commission headed by shri vijay. It has introduced new criteria, the tax effect, for states, with 2. Download 15th finance commission report pdf for upsc 2020. The 14th finance commission used the 2011 population data, in addition to the 1971 data. Apr 27, 2020 the 14 th finance commission of india is constituted in the chairmanship of the former rbi governor mr. Reddy was appointed the chairman of the commission. Reddy for the period of april 1, 2015, to march 31, 2020 the 14th finance commission. Thirteenth finance commission economic and political weekly. The recommendations of the commission entered force on april 2015. These measurescould be recommendations on both grants in aid as well as. The finance commission is dissolved after submitting its recommendations to the government of india. The 15th finance commission is the first finance commission set up after the abolishment of the planning commission.
The commission submitted its report on 30 november 2004 and covered the period from 2005. Report summary the finance commission is a constitutional body formed by the president of india to give suggestions on centrestate financial relations. It may be acknowledged that the present report is largely driven by the honble supreme court when in the matter of imtiyaz ahmad1 it directed the commission. In this regard, the ffc has recommended that books of accounts prepared by. States share in the net proceeds of union tax revenues increased to 42% from 32% earlier. The 14th finance commission had importantly recommended for greater devolution by increasing state share from 32% to 42% in the central tax kitty. The share of states in the net proceeds of the shareable central taxes should be 42%. The fourteenth finance commission was constituted by the president under article 280 of the constitution on jan. Area is used as a criterion as a state with larger area has to incur additional administrative costs to deliver services. The 14th finance commission report has been accepted by the center,the report has been.
The authors would like to thank the commission for their comments and suggestions on the earlier version. The recommendation of fourteenth finance commission for the award. Macroeconomic policy simulations for the 14th finance commission n. The share of states in the centres taxes is recommended to be decreased from 42% during the 20152020 period to 41% for 20202021. Other than tax devolution vertical and horizontal which are specified in percentages, other transfers. Highlights of 14th finance commission report ficci. Oct 20, 2019 the 15th finance commission is the first finance commission set up after the abolishment of the planning commission. Report of the 15th finance commission for fy 202021. Guidelines for local body grants recommended by the. Union government, pointing out that apprehensions in the. The first report, consisting of recommendations for the financial year 202021, was tabled in parliament.
As per the constitution, the committee appointed every five years and consists of a chairman and four others members. 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 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. The fourteenth finance commission had submitted its report to the president pranab mukherjee in december 2014. The commission s chairman was former reserve bank of india governor y. Macroeconomic policy simulations for the 14th finance commission. The finance commission miscellaneous provisions act, 1951 additionally defines the terms of qualification.
In december 2014, commission had submitted its report to the president pranab mukherjee. Why states are demanding more from the 15th finance commission. This commission is expected to submit its report by november end 2019. The thirteenth finance commission submitted its report in. They also deal with devolution of nonplan revenue resources. 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. The headquarter of finance commission is in new delhi.