15th Finance Commission: Members, Terms of Reference

March 24, 2019
 
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The 15th Finance Commission was constituted on November 27, 2017. It is headed by former Revenue Secretary and former Rajya Sabha MP N.K. Singh. The Commission is slated to submit its recommendations by October 30th, 2019.

15th finance commission

15th Finance Commission Members

  • Head of Commission: Shri N.K.Singh (former Member of Parliament and former Secretary to the Government of India)
  • Secretary to the Commission – Shri Arvind Mehta
  • Full time members
    1. Shri Ajay Narayan Jha (Earlier Shri Shaktikanta Das was member of the commission. However after his appointment as Governor of RBI, Shri Ajay Narayan Jha was appointed as member of commission)
    2. Anoop Singh (Adjunct Professor, Georgetown University)
  • Part-time members
    1. Ashok Lahiri (Chairman (Non-executive, part time), Bandhan Bank)
    2. Ramesh Chand (Member, NITI Aayog)

15th Finance Commission Time Period

The recommendations, to be observed for a period of five years, will kick in from April 1, 2020 to March 31, 2025.

15th Finance Commission Terms of Reference (ToR)

Terms of Reference and the matters that shall be taken into consideration by the 15th Commission in making the recommendations are:

  1. The distribution between the Union and the States of the net proceeds of taxes which are to be divided between them and the allocation between the States of the respective shares of such proceeds.
  2. The principles which should govern the grants-in-aid of the revenues of the States out of the Consolidated Fund of India and the sums to be paid to the States by way of grants-in-aid of their revenues
  3. The measures needed to augment the Consolidated Fund of a State to supplement the resources of the Panchayats and Municipalities in the State on the basis of the recommendations made by the Finance Commission of the State
  4. The Commission shall use the population data of 2011 while making its recommendations
  5. Other important considerations:
    • The impact on the fiscal situation of the Union Government of substantially enhanced tax devolution to States following recommendations of the 14th Finance Commission, coupled with the continuing imperative of the national development programme including New India – 2022
    • The impact of the GST, including payment of compensation for possible loss of revenues for 5 years, and abolition of a number of cesses, earmarking thereof for compensation and other structural reforms programme, on the finances of Centre and States
    • Efforts made by the States in expansion and deepening of tax net under GST
    • Efforts and Progress made in moving towards replacement rate of population growth
    • Progress made in increasing tax/non-tax revenues, promoting savings by adoption of Direct Benefit Transfers and Public Finance Management System, promoting digital economy and removing layers between the government and the beneficiaries
    • Progress made in promoting ease of doing business by effecting related policy and regulatory changes and promoting labour intensive growth

Read complete Terms of Reference here

15th Finance Commission Recommendations

Some of the recommendations of 15th Finance Commission are:

  • Reducing states share by 1% from Centre’s divisible pool to 41% in 2020-21 as against 42%, citing reasons of security and special needs of the union territories of J&K and Ladakh
  • It used 2011 population data for its recommendations.

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