News:The Finance Minister has tabled the interim report of the 15th Finance Commission recommendations.
About 15th Finance Commission:
- The 15th Finance Commission was constituted by the President of India under the chairmanship of NK Singh.
- The term of the commission was originally set to end in October 2019 but was extended to November 30, 2019.
- Its recommendations will cover a period of five years from April 2021 to March 2026.
Interim report recommendations:
- It has recommended 41% share for states from Centre’s divisible pool in 2020-21 while making a special provision of 1% for the new Union territories of Jammu & Kashmir and Ladakh.
- It has recommended an allocation of Rs 28,983 crore for disaster risk management in 2020-21, in addition to disaster response funds through setting up of mitigation funds at both state and national level.
- However,the Commission has not yet set aside funds separately for defence spending needs.It said that a special committee will be set up to examine the same.
About Finance commission:
- The Finance Commission is constituted by the President under Article 280 of the Constitution mainly to give its recommendations on distribution of tax revenues between the Union and the States and amongst the States themselves.
- The Commission is appointed every five years.It consists of a Chairman and four other members.
Functions of Finance Commission
- The Commission makes recommendations to the President of India on the distribution of tax proceeds between the Union and the States and the share of each state.
- The Commission also decides the principles that govern the payment of grants-in-aid to states from the Consolidated Fund of India.
- The President of India can also refer any other matter to the Finance Commission in the interest of building a sound financial system.