February 28, 2018:
14th Finance Commission had given states a record 42 per cent of the Tax Revenues collected by the Centre.
In a first, Finance Commission which recommends how much money states should get out of the taxes collected by Central Government will define what a populist measure is and recommend the incentives for States that do not resort to them.
15th Finance Commission, headed by N K Singh, has many firsts to do in the nearly six decade-old history of the constitutionally mandated body.
NK Singh stated that,It has also been asked to propose measurable performance-based incentives for the States that have made efforts to expand and deepen the tax net, slowed population growth, promoted ease of doing business and saved money by adopting Direct Benefit Transfer where government dole is paid via bank accounts of users.
Commission has been asked to recommend the incentives for States that have been able to control or eliminate incurring expenditure on populist measures.
He further added that,"The Commission has been asked to look at monitorable performance criteria on things like the progress made on ease of doing business, demography management and whether or not a state is deliberately pursuing a populist policy. It is now for the Commission to decide what a populist policy is."
Previous 14th Finance Commission had recommended that states should get a record 42 per cent of the tax revenues collected by the Centre. Recommendations of all the previous Finance Commissions have been accepted by the government.
For the purpose of devolution of the funds, the panel has been asked to take a census of 2011 as basis for population data instead of 1971 Census which was the basis of recommendations till the 13th Finance Commission, drawing some criticism from southern states.
Picture Source :
