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The Union Government with the approval President of India has constituted 15th Finance Commission which will make recommendations for the five years commencing from 1 April 2020 to 31 March 2025.
FACTS FOR PRELIMS
Article 280 reads: President should, within two years of commencement of the Constitution and thereafter on expiry of every 5th year, or at such intervals as he/ she thinks necessary, would constitute a Finance Commission.
A Finance Commission would consist of a Chairman and 4 other members who are all will be appointed by the President.
Terms of Reference of Finance Commission
The Commission will make recommendations on distribution of net proceeds of taxes between Centre and States, the principles which should govern grants-in-aid of revenues of States out of Consolidated Fund of India. It will also suggest measures needed to augment Consolidated Fund of State to supplement resources of Panchayats and Municipalities in State on basis of recommendations made by Finance Commission of State.
It will also review current status of finance, debt levels, cash balances, deficit and fiscal discipline efforts of Centre and States and recommend fiscal discipline efforts of Centre and States and recommend fiscal consolidation roadmap for sound fiscal management. While making its recommendations, it will look at resources of Central Government and State Governments for five years commencing on 1st April 2020 on basis of levels of tax and nontax revenues likely to be reached by 2024-25
SOURCE – PIB.