Cabinet clears setting up of 15th Finance Commission
The commission would recommend the formula for sharing taxes between the Centre and the state and allocation of each state for the five-year period between 2020 and 2025.
Union cabinet on Wednesday cleared the setting up of the 15th Finance Commission to decide on the devolution of tax revenue between the Centre and state governments.
The Fifteenth Finance Commission would recommend the formula for sharing taxes between the Centre and the state and allocation of each state for the five-year period between 2020 and 2025.
Although the Finance Panel is set up about two years before the end of the previous five-year period, the process this time has reportedly been advanced to change the fiscal year cycle from January to December.
The Finance Commission, a statutory body, usually requires a period of at least 15-18 months to prepare its report. It is then studied by the Finance Ministry and a formal announcement of its recommendations are made in the next Union Budget.
In the Union Budget 2017-18, the Finance Ministry had allotted ₹10 crore for setting up the commission.
The Fourteenth Finance Commission, which was chaired by former Reserve Bank of India Governor YV Reddy, made its recommendations for the period between April 1, 2015 and March 31, 2020.