Friday, 26 February 2016

Important Notes Of "Finance Commission of India"

Dear Readers,
FINANCE COMMISSION OF INDIA
A finance commission is set up every five years by the President under Article 280 of the Constitution. Finance Commission of India came into existence in 1951.It was formed to define the financial relations between the centre and the state. These recommendations cover a period of five years. The commission also lays down rules by which the centre should provide grants-in-aid to states out of the Consolidated Fund of India. It is also required to suggest measures to augment the resources of states and ways to supplement the resources of panchayats and municipalities.

Composition of the Fourteenth Finance Commission
The Fourteenth Finance Commission has been set up under the Chairmanship of Dr.Y.V.Reddy
[Former Governor Reserve Bank of India].
Other Members of the Commission are:

  • Ms. SushmaNath [Former Union Finance Secretary],
  • Dr.M.Govinda Rao [Director, National Institute for Public Finance and Policy, New Delhi].
  • Dr.SudiptoMundle, Former Acting Chairman, National Statistical Commission.
  • Prof Abhijit Sen (Member, Planning Commission) is the part timeMember of the Fourteenth Finance.
  • Commission. Shri Ajay Narayan Jha is the Secretary, Fourteenth Finance Commission.



Qualifications of the Members
The Chairman of the Finance Commission is selected among people who have had the experience of public affairs. The other four members are selected from people who:

  • Are, or have been, or are qualified, as judges of High Court, or
  • Have knowledge of Government finances or accounts, or
  • Have had experience in administration and financial expertise;
  • Have special knowledge of economics
Procedure and Powers of the Commission:
The Commission has the power determine their own procedure and:

  • Has all powers of the civil court as per the Court of Civil Procedure, 1908.
  • Can summon and enforce the attendance of any witness or ask any person to deliver information or produce a document, which it deems relevant.
  • Can ask for the production of any public record or document from any court or office.
  • Shall be deemed to be a civil court for purposes of Sections 480 and 482 of the Code of Criminal Procedure, 1898.

Tenure of the 14th Finance Commission:
The Finance Commission is required to give its report by 31st October, 2014.Its recommendations will cover the five year period commencing from 1st April, 2015.

Among the major recommendation

  • It includes the centre to share 42% of the divisible pool of tax to the states which is 10% more than the present share.
  • It recommended doing away with the distinction between unconditional and conditional transfers.
  • Previously the transfers were a mix of conditional and unconditional funds, where the conditional transfers is given for serving some specific purpose. Here the state having the flexibility to utilize the conditional transfers as per the needs.
  • The commission, on deciding the share of states has done away with the component of previous commission namely, fiscal discipline. Instead it introduced two new components that are changes in population between 1971 and 2011 and giving credit to the success in retaining forest cover.
  • The commission along with recommended on implementation of Goods and Services Tax and laid out a fiscal road map for the economy.

All The Best !!!!!!

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