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. Discuss the recommendations of the 14th finance commission the recommendations of the 14th finance commission are as follows. Fourteenth finance commission ffc for rural and urban local bodies local bodies grant. National finance commission the primary mandate of the national finance commission is to recommend a formula for sharing net proceeds of tax revenues of the centre with the states. Essential recommendations of finance commission of india. Recommendations 14th finance commission headed by former rbi governor y. The 14th finance commission could go a step forward and recommend 5% and 3% of the union divisible pool, under article 280 clause 3 bb and c, to panchayats and municipalities respectively. Article 275 grant in aid of revenues grantinaidstatutory grantsnonplan grants are to. 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. Reddys 14 th finance commission for vertical devolution of taxes from union to states. Indian economy and issues relating to planning model answer. It is in pursuance of clause 1 of article 280 of the constitution, read with the provisions of the finance commission miscellaneous provisions act, 1951 e.
Fourteenth finance commission ministry of housing and urban. The fourteenth finance commission ffc was appointed on 2 nd january, 20 under the chairmanship of dr. 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. The finance commission is a constitutionally mandated body that is at the centre of fiscal federalism. Article 280 of the constitution of india requires the constitution of a finance commission every five years, or earlier. Fourteenth finance commission finance commission, india.
The fifteenth finance commission ffc was constituted by the government of india on 27th november 2017 after the ceremonial approval of the president. The fourteenth finance commission 14fc stipulates that a detailed procedure. The fourteenth finance commission of india was a finance commission constituted on 2 january 20. The commission submitted its report on 30 november 2004 and covered the period from 2005. Guideline for use of incentive amount in state finance commissions. The recommendation of fourteenth finance commission for the award period 201520 include, interalia, release of grantinaid to state. Pdf the 14th finance commission has been hailed as. These measurescould be recommendations on both grants in aid as well as suggestions for stepsto be taken by the states in this regard. The government of india, with the approval president of india, has constituted fifteenth finance commission. The commission has the responsibility of considering any matter referred to the commission by the president in the interest of sound finance. The difference between th and 14th finance commission and its impact on orissa from a view point.
The one of the important 14th finance commission recommendations is enhanced share of the state in the revenue. Discuss the main recommendations of 14th finance commission. It was created with the objective of giving recommendations on fiscal matters from april 1st 2020. This is the largest ever jump in percentage of devolution. The ffc has submitted its recommendations for the period 201516 to 202021. The report by 14th finance commission had a note of dissent from abhijit sen. The recommendations, to be observed for a period of five years, will kick in from april 1, 2020. 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. The 14th finance commission report has been accepted by the center,the report has been.
Major recommendations of th finance commission headed by shri vijay. 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 commission had also asked to do away with a distinction between plan and nonplan expenditure. Y v reddy the share of states in the net proceeds of the shareable central taxes should be 42%. The 1% decrease is to provide for the newly formed union territories of jammu and kashmir, and ladakh from the resources of the central government. 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. Reddy 14th finance commission holds that tax devolution is the primary route for resource transfer to. Unlike the first finance commission, the second finance commission recommended unconditional grants.
The 14th finance commission had recommended that since more devolution is taking place that means the 14th finance commission has taken into account the needs for funds regarding centrally sponsored schemes as well. The recommendations of the commission entered force on april 2015. The fourteenth finance commission report will go a long way towards promoting cooperative federalism. The commission was headed by veteran economist of india, c. The government today 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 pradesh. 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. Key recommendations of the 14th finance commission i. 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. The thirteenth finance commission submitted its report in.
Recommendations made by the 14th finance commission of india the major recommendations of 14th finance commission headed by prof. On the whole, the distribution made by the second commission was fair and just. Government accepts 14th finance commission recommendation for. The share of states in the centres taxes is recommended to be decreased from 42% during the 20152020 period to 41% for 20202021. Guidelines for the performance grant disbursement in fourteenth finance commission.
In the case of the 14th finance commission, that was 25%. So that means the 14th finance commission recommended that more burden should be put now on states. Key recommendations of 14th finance commissionmains2016. 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. 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. Tax devolution and grants to bihar as per the recommendations of thirteenth finance commission rs. Demanding an increase in the share of states in centres tax revenue from the current 32% to 42%. Guidelines for local body grants recommended by the fourteenth finance commission.
The fourteenth finance commission ffc union budget. 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. The th finance commission made a beginning by allocating 2. Highlights of 14th finance commission report government. Doc major difference between th and 14 th finance. 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. 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 third finance commission was set up in december 1960. The commissions chairman was former reserve bank of india governor y. We have to wait to read the full set of recommendations of the 15th finance commission by october 30, 2020. Major recommendations of 14th finance commission headed by prof. The main recommendations of the commission were as follows. Website content managed by department of expenditure,ministry of finance,goi designed, developed and hosted by national informatics centre. Govinda rao, abhijit sen, sudipto mundle, and an jha. The accepted recommendations are for the fiveyear period 201516 to 201920. Download 15th finance commission report pdf for upsc 2020. Our approach and recommendations on vertical devolution 89.
Recently, states such as bihar and tamil nadu have said that the recommendations of the 14th finance commission are averse to their interests. The president under article 280 lays the recommendations of the finance commission before each house of the parliament with an explanatory note as to the action to be taken on the recommendations. Recommendations of the 14th finance commission the hindu. The commission shall make recommendations regarding the sharing of union taxes, principles governing grantsinaid to states and transfer of resources to local. This is 10 percentage points higher than the recommendation of th finance commission. On 5th december 2014, the 14th finance commission presented its report to the union government. Guidelines for local body grants recommended by the fourteenth. It was recommended the ratio of basictoperformance grant be kept at 90. Performance audit of ulbs on financial and performance reporting i. This lesson explains the 14th finance commission recommendations hindi hot topics of economics for nta net.
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