Welcome to the Presentation on finance

7/21/2019 Welcome to the Presentation on finance

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Welcome to the Presentation on

Finance Commission of india


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commission

1. the act of committing or giving in charge.2. an authoritative order, charge, or direction.3. authority granted for a particular action or function.

4. a document granting such authority.5. a document conferring authority issued by the president of the U.S. to o cers inthe military services and by state governments to justices of the peace, etc.6. the position or rank of an o cer in any of the armed forces.7. a group of persons authoritatively charged with particular functions: a parkscommission.8. a task or matter committed to one s charge! o cial assignment: The architect

received a commission to design an ofce building.9. the act of committing or perpetrating a crime, error, etc.10. something that is committed.11. authority to act as agent for another or others in commercial transactions.12. a sum or percentage allowed to agents, sales representatives, etc., for theirservices.13. to give a commission to.14. to authori"e! send on a mission.15. to order #a warship, military command, etc.$ into readiness for active duty.16. to give a commission or order for: to commission a painting or the lobby.

Commission in the United Kingdom, a committee or advisory body created by%oyal &arrant to conduct a special en'uiry! in the United States, a committee,

advisory board, or governmental department.


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(he Finance Commission of India came into e)istence in *+ *. -t wasestablished under Article 2 ! of the -ndian onstitution by the/resident of -ndia . -t was formed to de0ne the 0nancial relations betweenthe centre and the state. (he 1inance ommission 2ct of *+ * states the

terms of 'uali0cation, appointment and dis'uali0cation, the term, eligibilityand powers of the 1inance ommission. 2s per the onstitution, thecommission is appointed every 0ve years and consists of a chairman andfour other members. Since the institution of the 0rst 0nance commission,stark changes have occurred in the -ndian economy causing changes in themacroeconomic scenario. (his has led to major changes in the 1inance

ommission s recommendations over the years. (ill date, (hirteen 1inanceommissions have submitted their reports.
http://en.wikipedia.org/wiki/Indian_Constitutionhttp://en.wikipedia.org/wiki/President_of_Indiahttp://en.wikipedia.org/wiki/Indian_economyhttp://en.wikipedia.org/wiki/Indian_economyhttp://en.wikipedia.org/wiki/President_of_Indiahttp://en.wikipedia.org/wiki/Indian_Constitution


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colspan="4"!Finance

Commissions

ppoin ed

FinanceCommission

3ear of 4stablishment hairman 5perational 6uration

Fi s *+ * 7. . 8eogy

*+ 9 ;

#econd *+ < 7. Santhanam *+ ;


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1inance ommissions, their (erms of %eference and %ecommendations

Fi s Finance Commission

(he 1irst 1inance ommission was appointed by the president on 9=8ovember *+ *, which was chaired by - . .C. +eo*/ . 5ther members ofthe commission included - . . . -enon , - . . a&s%alend a ao , .

-adan and - . -. . an*ac%a i . 2fter - . . . -enon s resignationon *@ 1ebruary *+ 9, - . . . -e% a was appointed as a member. (hecommission was asked to make recommendations regarding:

*. 2llocations of income ta) and Union 4)cise 6uties and ta) sharing.9. 2mounts payable as FrantsG inG2id to the States in need of 2ssistance

under the Hsubstantive portion of lause * of 2rticle9; I.

D. FrantsGinG2id to certain States in lieu of their share of e)port duty on jute and jute products according to 2rticle 9;D J ontinuation oradjustment of the terms of agreement with /art B States under 2rticle9;@ #*$ or under 2rticle D=


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#econd Finance Commission

(he Second 1inance ommission was constituted by president %ajendra/rasad, on * Cune *+


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$%e $%i d Finance Commission

(he (hird 1inance ommission was appointed in the year *+


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$%e Fo& % Finance Commission of India (he 1ourth 1inance ommission was constituted on *@ Aay *+, underthe chairmanship of 6r. /.?. %ajamannar. 5ther members of the

ommission includedShri Aohan Eal Fautam Shri 6.F. 7arve /rof. Bhabatosh 6atta Shri /. .Aathew, Aember Secretary.

(he ommission suggested in its report that there should be greater coGordination between the entre and the States in common 0nancialinterests for which it recommended the establishment of a permanent

organi"ation in the Ainistry of 1inance

$%e Fif % Finance Commission of India (he 1ifth 1inance ommission was constituted by the /resident of -ndia on* Aarch *+


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$%e #i' % Finance Commission of India

(he Si)th 1inance ommission was incorporated in the year *+;Dconsisting of Shri 7. Brahmananda %eddi as the chairman and the followingfour other Aembers, namely:G Shri Custice Syed Sadat 2bal Aasud , 6r.B.S. Ainhas6r. -.S. Fulati , Shri F. %amachandran, Aember Secretary,%ecommendations.

(he States demanded the inclusion of corporation ta) into the divisibleincome ta) and *== allocation of the net proceeds to them. (he

commission e)pressed that such inclusion was constitutionally forbiddenbut it can be reviewed by 8ational 6evelopment ouncilStates share was increase from ; M to @=M due to the decrease in thedivisible pool as the arrears of the advance ta) collection had been cleared

$%e #e(en % Finance Commission of India

-ntroduction (he Seventh 1inance ommission was incorporated in theyear *+;@ consisting of Shri C.A. Shelat as the chairman and the followingfour other Aembers, namely:G6r. %aj 7rishna 6r. .K. Kanumantha %ao Shri K.8. %ay Shri ?.B. 4swaran,Aember Secretary.%ecommendations

(he share of the states in the net proceeds should be raised to @ Me)cepting the share of the Union (erritories which would be 9.*+M of net
http://en.wikipedia.org/wiki/C.H._Hanumantha_Raohttp://en.wikipedia.org/wiki/C.H._Hanumantha_Raohttp://en.wikipedia.org/wiki/C.H._Hanumantha_Raohttp://en.wikipedia.org/wiki/C.H._Hanumantha_Raohttp://en.wikipedia.org/wiki/C.H._Hanumantha_Rao


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$%e )i*% % Finance Commission of India

(he 4ighth 1inance ommission was constituted by the /resident of -ndia,on 9@ 2pril *+@> under the chairmanship of Shri 3.B. havan. (hecommission also consisted of the following membersShri Custice Sabya Sachi Aukherjee 6r. .K. Kanumantha %ao Shri F. .Baveja Shri 2.%. Shirali Shri Custice (./.S. hawla Shri 8.?. 7rishnan,Secretary

$%e +in % Finance Commission of India

(he 8inth 1inance ommission was set up in Cune *+@; under thechairmanship of Ar. 8.7./ Salve along with the following membersShri Custice 2bdus Sattar Nureshi 6r. %aja C. helliah Shri Eal (hanhawlaShri Aahesh /rasad Shri S. ?enkitaramanan Shri ?enkitaramanan Shri %.7eishing Shri 7.?.%. 8air

$%e $en % Finance Commission of India

(he (enth 1inance ommission was incorporated in the year *++consisting of Shri 7rishna handra /ant as the chairman and the followingfour other Aembers, namely

6ebi /rosad /al, Aember of /arliament, Aember Shri B./.%. ?ithal, Aember. %angarajan, Aember Shri A. . Fupta, Aember Secretary
http://en.wikipedia.org/wiki/C.H._Hanumantha_Raohttp://en.wikipedia.org/wiki/C.H._Hanumantha_Raohttp://en.wikipedia.org/wiki/C.H._Hanumantha_Raohttp://en.wikipedia.org/wiki/C.H._Hanumantha_Raohttp://en.wikipedia.org/wiki/C.H._Hanumantha_Rao


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$%e )le(en % Finance Commission of India

(he 4leventh 1inance ommission was appointed by the president on D Culy*++@ for the period 9=== = .-t was chaired by : /rof. 2.A. 7husro and itsmembers were Shri 8. Cain, Shri C. Cetly, 6r. 2maresh Bagchi, Shri (.8.Srivastava

$%e $,elf % Finance Commission of India-ntroduction

(he (welfth 1inance ommission was appointed on * 8ovember 9==9 tomake recommendations on the distribution of net proceeds of shareableta)es between union and states. (he commission was headed by veteraneconomist of -ndia, . %angarajan. (he commission submitted its report onD= 8ovember 9==> and covered the period from 9== to 9=*=.Aajor %ecommendations of *9th 1inance ommission#a$AacroGeconomic stability#b$$ 6istribution of Union (a)#c$ Frants to local bodies#d$ alamity %elief 1und#e$$ Frant in aids to the states


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-a o ecommenda ions of 13 % Finance Commission

*. (he share of states in the net proceeds of the shareable entral ta)esshould be D9M.(his is *. M higher than the recommendation of *9th1inance ommission .

9. %evenue de0cit to be progressively reduced and eliminated, followed byrevenue surplus by 9=*D *>.

D. 1iscal de0cit to be reduced to DM of the F6/ by 9=*> * .>. 2 target of


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Report of the 13th Finance Commission (2010-2015)

(he Fovernment must cut its 0scal de0cit to DM of the F6/ by the end of0scal year 9=*DG*> and eliminate its revenue de0cit in 9=*>G* ,according to the key recommendations of the *Dth 1inance ommission.

(he 0scal de0cit is estimated at .;M in the year ending on Aarch 9=**,and will fall further to >.@M in the year 9=**G*9, a *Dth 1inance

ommission said. (he report of the *Dth 1inance ommission, said thatthe 0scal de0cit should drop to >.9M in 9=*9G*D and to DM in 9=*DG*>.1inance Ainister /ranab Aukherjee said that the Fovernment hasaccepted all major suggestions of the *Dth 1inance ommission. (he

entre must cap its total debt at G* , the report of the *Dth 1inance ommission stated.


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/roposals to *>th 0nance commission

2s the states are subjected to more and more interstate migrant workers and illegal migrants from the neighbouring countries, the 0nancecommission shall give appropriate weightGage in distribution of the totalta)es to the states based on these criteria. (he states which are givingmore employment to interstate workers are ahead indemographic transition . 6emographic transition of a state is a real inde)O status of all round human and economical development.

(he states with coast line shall be given appropriate share from theroyalty P ta)es collected by the central government from the mineralsproduced #including oil O natural gas$ from the area of territorial waters and e)clusive economic "one similar to land based minerals production.2rtcles * O D of the constitution de0ne -ndia as union of two entities onlywhich are either sates or union territories. (here is no third entity such asterritorial waters or e)clusive economic "one. (hese are parts of states Punion territories under -ndian union.
http://en.wikipedia.org/wiki/Interstate_Migrant_Workmen_Act_1979http://en.wikipedia.org/wiki/Demographic_transitionhttp://en.wikipedia.org/wiki/Territorial_watershttp://en.wikipedia.org/wiki/Territorial_watershttp://en.wikipedia.org/wiki/Exclusive_economic_zonehttp://en.wikipedia.org/wiki/Part_One_of_the_Constitution_of_Indiahttp://en.wikipedia.org/wiki/Part_One_of_the_Constitution_of_Indiahttp://en.wikipedia.org/wiki/Part_One_of_the_Constitution_of_Indiahttp://en.wikipedia.org/wiki/Part_One_of_the_Constitution_of_Indiahttp://en.wikipedia.org/wiki/Exclusive_economic_zonehttp://en.wikipedia.org/wiki/Territorial_watershttp://en.wikipedia.org/wiki/Territorial_watershttp://en.wikipedia.org/wiki/Demographic_transitionhttp://en.wikipedia.org/wiki/Interstate_Migrant_Workmen_Act_1979


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(he 1inance ommission is being setGup every 0ve yearsby Fovernment of -ndia to discharge the mandate laiddown in articles 9;=, 9; and 9@= of the constitution toperform D diLerent types of tasks:G

(o recommend distribution, between Union and States,of the net proceed of ta)es out of divisible pool.

(o recommend the allocation between the diLerentStates of such proceeds, and

(hirdly, to recommend measures to supplement the

resources of the /anchyats and Aunicipalities byaugmenting the consolidated funds of individual States,taking into account the recommendations of therespective State 1inance ommissions #S1 s$.

)+) I ) I+)#


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1or augmenting the resources of rural local bodies interms of award of grant based on certain principles. (hegrant have two main components.

a: asic an 1or years #9=*=G** to 9=*>G* $

;: e fo mance an 1or > years #9=**G*9 to9=*>G* $2 small portion of grants is allocated to Special 2reacovered by the ? O ?- Schedules and areas e)emptedfrom the purview of /art Q and Q- #2$ of the constitution.

(his grant is called R #pecial ea asic an , andaccessible for all the 0ve years to meet some of thedevelopment needs of these areas.

13 % FCecommenda ions


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6uring * st year Feneral Basic Frant is being provided to all F/s for implementationvarious development measures and basing on this performance as well as ful0llmentof certain conditionality -ncentive /erformance grant shall be released.-ncentive /erformance Frant is available for the period from 9=**G*9 to 9=*>G* .

(he State is eligible to draw its allocations, if it complies with the following conditions:Aust put in place a Supplement Budget to the Eocal Bodies.

Aust have an audit system as stipulated by 2F and maintenance of accounts of/%-s.Should appoint independent Eocal Body 5mbudsman who will look into complaints ofcorruption and maladministration against the functionaries of Eocal Bodies, bothelected members and o cials and recommend suitable action. Should make necessary arrangement for electronically transferring Eocal BodyFrants #eG(ransfer$ within 0ve days of receipt from entral Fovernment.

(he State Fovernment should ade'uately empower Eocal Body for levying propertyta) and other ta)es to raise the income of /%-s.

-odali ies of eleasin* 13 FCan


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(he ommission have speci0cally recommended to useabove grants on the following components.

6rinking water supply,Sewerage, Solid waste management #rural sanitation$,5perational e)penses #Aaintenance of 2ccounts,

onducting of 2udits, reation of the 6atabase$ etc.

an s ecommended ;/ 13 % FC( in Crore)

Components 2010-11 2011-12 2012-13 2013-14 2014-15 Total

1 General Basic

Grant241.29 279.78 2!.99 87.4 4"8.71 1!94.2#

2 General

Performance#.## 9".!! 224.41 2!4.7# 12.2 897.##

3 Special Area Grant 19. 9 19. 9

Total 260 6! 3"5 44 551 40 652 13 ""0 #4 2610 5#


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C i e ia fo dis i;& ion ofan s$he %rants have been distrib&ted to the 'ancha(ats based on their pop&lation.

+9 F/s$

==*G; ==

#9=> F/s$

; =*G*====

# ;9 F/s$

T*====

#*9 F/s$

ategory Basic

/erformance (otal Basic

/erformance(otal Basic


/erformance (otal

11:

6& *.; =.== *.; *.+9 =.== *.+9 9.=@ =.== 9.=@ 9.* =.== 9.*Sanitation *.> =.+= D.D> 9. D =.+D D.> =.@9 D.=< 9.DD =.@< D.*+* #&;$o al 3.98 1.46 5.44 4.34 1.59 5.93

4.68 1.72 6.40

4.861.79 6.651

13:

6& 9.>D *.;@ >.9* 9...+@ 9.++ 9.*@ .*;Sanitation 9.9< *.< D.+* 9.> *.;+ >.9> 9.< *.+D >. @ 9.; 9.=* >.; #&;$o al 4.69 3.43 8.12 5.12 3.74 8.86

5.53 4.03 9.56

5.744.19 9.934


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C i e ia fo dis i;& ion ofan s (he grants have been distributed to the /anchayats based ontheir population.

+9 F/s$

==*G; ==#9=> F/s$

; =*G*====# ;9 F/s$

T*====#*9 F/s$

ategory Basic


/erformance(otal Basic


/erformance (otal

14:

6& 9.+* 9.=+ .== D.*+ 9.D= .>+ D.> 9.>@ .+D D. @ 9. ; . 9.** .= D.*; 9.9@ .> D.9+ 9.D; .@ 9.>; .+ D.@* 9.;* .*9 9.+D ;.= >.9; D.=D ;.DSanitation D.9D 9.D= . D D. * 9.>+


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C i e ia fo dis i;& ion of an s s peop&la ion of . :

#%S. -8 E27K$


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$%an@ /o&

Documents

Welcome to the Presentation on finance