Fifteenth Finance Commission

Fifteenth Finance Commission
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Highlights

The Government of India, with the approval President of India, has constituted Fifteenth Finance Commission in pursuance of Clause (1) of Article 280 of the Constitution. The Commission will make recommendations for the five years commencing on April 1, 2020. 

The Government of India, with the approval President of India, has constituted Fifteenth Finance Commission in pursuance of Clause (1) of Article 280 of the Constitution. The Commission will make recommendations for the five years commencing on April 1, 2020.

This Commission is headed by N K Singh, former Member of Parliament and former Secretary to the Government of India. Shaktikanta Das, former Secretary to the Government of India, and Dr Anoop Singh, Adjunct Professor, Georgetown University, are the members of the Commission. Dr Ashok Lahiri, Chairman (Non-executive, part time), Bandhan Bank, and Dr Ramesh Chand, Member, NITI Aayog, are the part-time members of the Commission. Arvind Mehta is the Secretary to the Commission.

The commission was set up to give recommendations for five fiscal years commencing on 1 April 2020.The main tasks of the commission were to "strengthen cooperative federalism, improve the quality of public spending and help protect fiscal stability."

There has been bitter criticism over the commission's 'terms of reference' (ToR). Politicians and observers, especially from the South India, criticise that the ToR specifies data of 2011 census, instead of 1971 census, which would deprive southern states of a fair share in central allocations as 2011 census shows less population in South because of better fertility controls, as compared to 1971.

But the commission's chairman had clarified the ToR had a provision for rewarding states, which were successful in eliminating or reducing expenditure incurred on populist schemes. The 14th Finance Commission had recommended that the share of the states should be 42%.

It was also asked to take 2011 Census into account. But, still the controversy rages, despite Finance Minister and Prime Minister affirming that no injustice would be done to the states with better fertility control rates. A major task of the 15th Finance Commission will be incentivising the states which have abided by fiscal discipline norms under the Fiscal Responsibility and Budget Management Act, 2003.

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