15th Finance Commission setting up has been approved by the Union Cabinet chaired by the Prime Minister Narendra Modi on November 22, 2017. It will assess the tax resources of the country and suggest a formula for their devolution among states for the five years commencing April 1, 2020 and to review the levels of fiscal deficit, among other issues. Under Article 280 (1) of the Constitution, it is a Constitutional obligation. The 15th Finance Commission would be headed by former Secretary to the Govt. of India N. K. Singh and the panel will include Shaktikanta Das, former Economic Affairs Secretary and Anoop Singh, adjunct professor at Georgetown University. Dr. Ashok Lahiri, Chairman (non-executive, part time), Bandhan Bank and Dr. Ramesh Chand, Member, NITI Aayog shall be the part time members of the Commission and Arvind Mehta shall be the Secretary to the Commission.
Finance commission has to take on itself the job of addressing the imbalances that often arise between the taxation powers and expenditure responsibilities of the centre and the states respectively. Primarily, it has to ensure a sense of equality in public services across the states.
Fourteen Finance Commissions have been constituted in the past.
The 14th Finance Commission was set up on January 2, 2013. Former Governor of the Reserve Bank of India, Y.V. Reddy was its Chairman and it had submitted the Report on December 15, 2014. Its recommendations cover the period from April 1, 2015 to March 31, 2020. The key recommendation of the 14th Finance Commission was an increase in the share of states in the centre’s tax revenue from 32% to 42% per cent, which was indeed the single largest increase ever recommended by any Finance Commission.
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