The practice has generally been to set up next Finance Commission within five years of the date of setting up of the previous Finance Commi
The practice has generally been to set up next Finance Commission within five years of the date of setting up of the previous Finance Commission.
Addressing the media after the cabinet meet in the capital, Finance Minister Arun Jaitley said “The Cabinet has approved Wage Policy for the 8th Round of Wage Negotiations for workmen in CPSEs”.
The Union Cabinet on Wednesday cleared the setting up of the 15th Finance Commission that will prescribe the formula for devolution of taxes between the Centre and States for the five years commencing on April 1, 2020. The Commission is required to make recommendations on distribution of the net proceeds of taxes between the Centre and the states. Jaitley said it usually takes two years for the Finance Commission to finalise its recommendations.
Sources said, former revenue secretary and last chairman of the FRBM committee NK Singh is among the top contenders to head the 15th FC, although the government is yet to finalise the name of the chairman.
The Finance Commission also suggests the principles which should govern the grants in aid of the revenues of the states out of the Consolidated Fund of India.
After the Cabinet decision, the government will have to issue a notification constituting the 15th Finance Commission and announcing its terms of reference. “Now, the officials of the 15th Finance Commission will be appointed”, he said.
Setting up the Finance Commission is a Constitutional obligation.
The Fourteenth Finance Commission, whose recommendations were accepted by the government and are effective till March 31, 2020, had mooted a ten percentage points jump in States’ share of the central pool of taxes from 32% earlier to 42%. In another major decision, the Cabinet further approved revision of salary of High Court and Supreme Court judges.