Centre has announced that former Planning Commission member N K Singh has been appointed as Chairman of 15th Finance Commission. This was conveyed by a government notification late evening.According to the statement, other members of Finance Commission are former Economic Affairs Secretary Shaktikanta Das and former Chief Economic Advisor Ashok Lahiri, Niti Aayog Member Ramesh Chand and Georgetown University professor Anoop Singh. Thereby, the constitution of Fifteenth Finance Commission has been notified, Ministry of Finance statement said.
The commission will review the current status of the finance, deficit, debt levels, cash balances and fiscal discipline efforts of the Union and the states. It will also recommend a fiscal consolidation road map for sound fiscal management. The commission is required to make recommendations on the distribution of the net proceeds of taxes between the Centre and the states, as per Article 280 of the Constitution. The commission also suggests the principles which should govern the grants in aid of the revenues of the states out of the Consolidated Fund of India.
The Cabinet Committee on Economic Affairs (CCEA) last week approved a proposal to set up of the 15th Finance Commission (FC) and finalise its terms of reference, finance minister Arun Jaitley had said on November 22 after a meeting of the Union Cabinet. The FC is formed every five years to recommend principles governing the allocation of tax revenue between the Centre, states and local bodies. The recommendations of the previous 14th FC, headed by former RBI governor YV Reddy, are currently valid for a period of five years through March 2020. In the Budget 2017-18, the government had allocated Rs 10 crore for setting up of the 15th FC.
The 14th FC had suggested an unprecedented 10 percentage points rise in tax devolution to states to 42% of the divisible pool of the tax revenue between FY16 and FY20, compared with the previous five-year period. It was accepted by the Narendra Modi government as it batted for cooperative federalism.