15th Finance Commission: "EMPOWER IAS"

 15th Finance Commission

• • The Finance Commission (FC) is a constitutional body, that determines the method and formula for distributing the tax proceeds between the Centre and states, and among the states as per the constitutional arrangement and present requirements.
  • Under Article 280 of the Constitution, the President of India is required to constitute a Finance Commission at an interval of five years or earlier.
  • The 15th Finance Commission was constituted by the President of India in November 2017, under the chairmanship of NK Singh. Its recommendations will cover a period of five years from the year 2021-22 to 2025-26.
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State Finance Commissions (SFCs)

• The State Finance Commission (SFC) is an institution created by the 73rd and 74th Constitutional Amendments (CAs) to rationalize and systematize State/sub-State-level fiscal relations in India.
• Article 243I of the Constitution mandated the State Governor to constitute a Finance Commission every five years.
• Article 243Y of the Constitution states that the Finance Commission constituted under article 243 I shall also review the financial position of the Municipalities and make recommendations to the Governor.

 

 

Concerns:

• States have not been setting up their SFCs regularly as mandated.
• They are not submitting the reports in time, lacking the proficiency.
• They have huge task of considering large number of local governments.
• They face a crucial problem of reliable data.
• SFCs and local governments are seen to be of inferior constitutional status than the Union FC.