Login With Google
Govt. extends 15th finance panel term
Why is it in the news?
- The Union Cabinet extended the term of 15th Finance Commission by one-year to October 30, 2020.
- The Finance commission is to decide on division of tax and other resources between the centre and the states.
More in the news
- The extension of the term will enable the commission to examine:
(1) Various comparable estimates for financial projections in view of reforms.
(2) New realities to finalise its recommendations for the period 2020-2026. This will effectively mean the 15th Finance Commission’s recommendations will be applicable for six years and not the conventional five-year period.
- The cabinet approved the 15th Finance Commission to submit first report for the first fiscal year viz. 2020-21.
- About Finance Commission:
(1) The Finance Commission is a constitutional body created by the President of India under Article 280 of the Constitution, 1950.
(2) Its main purpose is to keep a check on the vertical and horizontal imbalances of the federal finance of India.
(3) Vertical imbalances refer to the imbalance between the revenue generated by the Centre and states and their expenditure needs.
(4) Horizontal imbalances refer to the failure of states to provide the comparable services due to their incapability to raise the necessary funds.
(5) It is usually constituted once in five years.
(6) The first Finance Commission was established in 1951.
Source
The Hindu.