Important
Notes Of "Finance Commission of India"
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.
Convention on mutual legal assistance in Criminal Matters.