N.K. Singh is 15th finance panel chief

N.K. Singh is 15th finance panel chief

Context

The Centre has announced that the Fifteenth Finance Commission would be headed by former Secretary to the government of India N.K. Singh

Other members

  • The panel, which is to make its recommendations for the five years beginning April 1, 2020, will include
  • Shaktikanta Das, former Economic Affairs Secretary
  • Anoop Singh, adjunct professor at Georgetown University

Part time members of the Commission

  • Dr. Ashok Lahiri, Chairman (non-executive, part time), Bandhan Bank
  • Dr. Ramesh Chand, Member, NITI Aayog shall be the

Panel’s mandate

  • The panel is tasked with the following,
  • Looking into tax collections and how they are to be divided between the Centre and the States,
  • The principles that should govern the grants in aid to the States
  • To review the levels of fiscal deficit, among other issues

What are grants in aid?

Apart from distribution of taxes between centre and states, the constitution provides for mainly two types of grants-in-aid viz. statutory grants and discretionary grants:

Statutory Grants

Article 275 makes provisions for statutory grants to needy states (not every state)

  • Charged on CFI: These are charged on Consolidated Fund of India
  • Such grants also include specific grants for promoting the welfare of the scheduled tribes in a state or for raising the level of administration of the scheduled areas in a state including the State of Assam
  • Recommended by FC: The bases of these grants are recommendations of finance commission.

Discretionary Grants

  • Under article 282, both centre and states are able to make any grants for public purpose even if they are not within their legislative competence
  • Discretionary, not mandatory: Since such grants are discretionary, there are no obligations to make such grants
  • During the planning commission era, these discretionary grants were in fact bigger than statutory grants and that is why planning commission had assumed very important role
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