Skip to main content

14th Finance Commission Assumption & Recommendations

What is Finance Commission(FC)?
It is appointed by President Under article 280 of the constitution. It has Five Members including a Chairperson. First FC  came in 1951 under K. C. Neogy and 14th FC eastablished in 2012 under Dr.Y. V Reddy for duration 2015-2020.The Fourteenth Finance Commission consisting of Dr. Y.V.Reddy, former Governor Reserve Bank of India, as the Chairman and the following four other members, namely: -

1. Prof Abhijit Sen ,Member, Planning Commission (Part Time)
2. Ms. Sushma Nath. Former Union Finance Secretary
3. Dr. M.Govinda Rao, Director, National Institute for Public Finance and Policy, New Delhi
4. Dr. Sudipto Mundle, Former Acting Chairman, National Statistical Commission
5. AN Jha, Secretary to the Commission.

Dr. Y.V.Reddy, Chaiman of 14th Finance Commission 
Functions of FC

i.Distribution of net proceeds of taxes between Centre and the States, to be divided as per their respective contributions to the taxes.
ii.Determine factors governing Grants-in Aid to the states and the magnitude of the same.
iii.To make recommendations to president as to 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.
iv.FC deals only with the revenue collected through the taxes by the centre i.e. corporeation,custom,excise,income,service taxes. These make up two thirds of the central receipts.

Recommendations of FC

i. TAX DEVOLUTION TO BE BASED ON AREA, POPULATION, DEMOGRAPHY, INCOME DISTANCE & FOREST COVER
Highest weight of 50 % is given to distance from the highest per capita income district, followed by population (1971 census) at 17.5 %, demography (2011 census) at 10 %, area at 15 % and forest cover at 7.5 %.

ii.CENTRE'S FISCAL AND REVENUE DEFICITS
Fiscal deficit should come down to 3.6 % of GDP in 2015-16 from projected 4.1 % in 2014-15 and then 3 % in following year. Revenue deficit to come down from 2.9 per cent in FY15 to 2.56 per cent in FY16 and then progressively reduce to 0.93 % by 2019-20.

iii.NATIONAL SMALL SAVING FUND (NSSF)
The panel has also called for excluding states from operation of the National Small Savings Fund (NSSF) from April 1, 2015. It says the exclusion will hamper the overall borrowing programme of the states and they will continue to have access to open market operations.

iv.BOOST FOR STATES' SHARE IN NET PROCEEDS OF TAX REVENUES
The commission has recommended states' share in net proceeds of tax revenues be 42 per cent, a huge jump from the 32 % recommend by the 13th Finance Commission.

v.GRANTS FOR LOCAL BODIES BE BASED ON 2011 POPULATION
Grants will be divided into two broad categories on the basis of rural and urban population -
(i) a grant constituting gram panchayats 
(ii) a grant constituting municipal bodies.

vi.Fiscal Responsiblity and Budget Management (FRBM) Act
It has also recommended that the Centre should consider an amendment to the Fiscal Responsiblity and Budget Management (FRBM) Act to strike out the definition of effective revenue deficit from April 1,2015 as it does not fit with global practices of classification of accounts expenditure.The panel has also said that the Union and state governments may also amend their respective FRBM Acts to provide a statutory ceiling on the sanction ofnew capital works to an appropriate multiple of the annual Budget provisions.



Popular posts from this blog

Easy way to understand Direct and Indirect speech rules

Introduction. There two ways to convey a message of a person, or the words spoken by a person to other person. 1.       Direct speech 2.       Indirect speech Suppose your friend whose name is Vipul tells you in College , “I will give you a pen”. You come to home and you want to tell your brother what your friend told you. There are two ways to tell him. Direct speech:   Vipul said, “I will give you a pen”. Indirect Speech:  Vipul said that he would give me a pen. In direct speech   the original words of person are narrated (no change is made) and are enclosed in quotation mark. While in indirect speech some changes are made in original words of the person because these words have been spoken in past so the tense will change accordingly and pronoun may also be changed accordingly. In indirect speech  the statement of the person is not enclosed in quotation marks, the word “ t...

English Error Spotting - Previous Year Questions of SSC CGL

Competition Zenith brings you a post on Error Spotting to boost your English for competitive exams. We are providing you the specifically chosen questions from previous year papers of SSC CGL with the best possible explanation in simplest of the language. Below are some questions with explanation: Questions 1. Have trust on(a)/God and everything(b) /will be right.(c) /(d) No error 2. The cattles (a) /are grazing (b) /in the fields.(c) /(d) No error 3. He is one of (a)/ the best novelists (b) /that has ever lived. Do you agree? (c)/no error (d) 4. On a rainy day (a) /I enjoy to watch TV (b) / with a hot cup of tea.(c ) /no error(d) 5. No sooner did (a)/I reach (b)/ Patna railway station than the train departed(c)/no error (d) 6. There is no agreement (a) / between you and I (b) /so we are free to go our way(c) /no error (d) 7. A variety of books (a) / is available in the market (b) / to help the students qualify the competitive examinations.(c) /no error 8....

Trigonometry And Its Short Tricks

Trigonometric Function Trigonometric Functions (Right Triangle) Special Angles Trigonometric Function Values in Quadrants II, III, and IV Examples: Example2: Example: 3: Unit Circle Addition Formulas: cos(X+Y) = cosXcoxY – sinXsinY cos(X-Y) = cosXcoxY + sinXsinY sin(X+Y) = sinXcoxY + cosXsin sin(X-Y) = sinXcoxY – cosXsinY tan(X+Y) = [tanX+tanY]/ [1– tanXtanY] tan(X-Y) = [tanX-tanY]/ [1+ tanXtanY] cot(X+Y) = [cotX+cotY-1]/ [cotX+cotY] cot(X-Y) = [cotX+cotY+1]/ [cotX-cotY] Sum to Product Formulas: cosX + cosY = 2cos [(X+Y) / 2] cos[(X-Y)/2] sinX + sinY = 2sin [(X+Y) / 2] cos[(X-Y)/2] Difference to Product Formulas cosX - cosY = - 2sin [(X+Y) / 2] sin[(X-Y)/2] sinX + sinY = 2cos [(X+Y) / 2] sin[(X-Y)/2] Product to Sum/Difference Formulas cosXcosY = (1/2) [cos (x-Y) + cos (X+Y)] sinXcoxY = (1/2) [sin (x+Y) + sin (X-Y)] cosXsinY...