Cabinet extends 15th Finance Commission term till October 30, 2020
The extension will enable the commission to examine various comparable estimates for financial projections in view of reforms and the new realities to finalise its recommendations for the period 2020-2026.
November 27, 2019 / 01:16 PM IST
The Cabinet on November 27 has extended 15th Finance Commission's term by a year to October 30, 2020. This is to facilitate a decision on the division of tax and other resources between the Centre and states.
The term, which was originally set to end in October 2019, was extended by a month to November 30.
"The extension will allow the FC to submit its first report for FY20-21 and its final estimation reports for FY21-22 to FY25-26," the statement read.
It will enable the commission to examine various comparable estimates for financial projections in view of reforms and the new realities to finalise its recommendations for the period 2020-2026, it added.
"The commission, on account of the restrictions imposed by the model code of conduct, completed its visit to states only recently. This has had a bearing on the detailed assessments of states requirements," the statement said.
The terms of reference for the commission are wide-ranging in nature, as per the statement. "Comprehensively examining their implications and aligning them to the requirements of the states and the central government will require additional time," it said.
The proposed increase in coverage of the period for which the commission's recommendations are applicable will help medium-term resource planning for the state governments and the central government.
"Making a five-year coverage available for the commission beyond April 1, 2021, will help both state and central governments design schemes with medium- to long-term financial perspective and provide adequate time for mid-course evaluation and correction," it further said.
It is anticipated that the impact of the economic reforms initiated in the current FY would be manifested in the data by the end of First Quarter 2020-21, it added.(With PTI inputs)