The Chairman and Members of the 15^thFinance Commission called on the Hon’ble President Shri Ram NathKovind and apprised him of the progress made in the work of the Commission so far.  The Finance Commission was constituted by the Government on November 27, 2017 under the chairmanship of Shri N.K. Singh and comprising of the following Members, Shri Shaktikanta Das, Dr.Anoop Singh, Dr. Ashok Lahiri and Dr. Ramesh Chand.   

The Terms of Reference of the Commission are broad ranging and entail the Commission to submit their recommendations on several key areas, viz., 

(i) The distribution between the Union and States of the net proceeds of taxes which are to be, or may be, divided between them under Chapter- I, Part XII of the Constitution and the allocation between the States of the respective shares of such proceeds;

(ii) The principles which should govern the grants-in-aid of the revenues of the States out of the Consolidated Fund of India and the sums to be paid to the States by way of grants-in-aid of their revenues under Article 275 of the Constitution for purposes other than those specified in the provisos to clause (1) of that article; and

(iii) The measures needed to augment the Consolidated Fund of a State to supplement the resources of the Panchayats and Municipalities in the State on the basis of the recommendations made by the Finance Commission of the State. 

Furthermore, the Commission is expected to recommend the fiscal consolidation roadmap of the Central and the State Government.  While doing so, it is expected to take into consideration the demand on the resources of the Central Government, particularly on account of defence, internal security, infrastructure, railways, planning and on the resources of the State Government in meeting on account of it, financing the socio-economic development, critical infrastructure, and balanced regional development.  It will study the impact on the fiscal situation of the Union Government following the devolution to States based on the 14^th Finance Commission recommendations and impact of the GST on the finances along with structural reforms on the finances of the States and the Centre.  The Commission is expected to consider measurable performance-based incentives for States on several matters, particularly expansion and deepening of tax net under GST and progress in moving towards replacement rate of population growth, achievements in implementation of flagship programmes, promoting ease of business and regulatory changes for labour intensive industry, progress in sanitation, solid waste and behavioural change to end open defecation.  As in the past, the Commission would review the financing of the disaster management initiatives with reference to the Disaster Management Act, 2005.  The recommendations of the Commission would cover five year period commencing 1^st April 2020 to 2025 and have been asked to make the recommendations available by 30^th October 2019.   

Since the constitution of the Commission, it has already undertaken intensive consultations with stakeholders, regional interactions and drawn-up tentative programme of visiting the various States.  The First visit of the Commission would commence from the State of Arunachal Pradesh in April followed by J&K.

Tax devolution and grants framework to guide fiscal consolidation and state funding, including performance incentives and GST impacts. The 15th Finance Commission is to recommend tax devolution between Union and States, allocation of State shares of divisible taxes, and principles and amounts of grants in aid under Article 275, assess fiscal impacts of GST and prior devolution, propose a fiscal consolidation roadmap for Centre and States, advise on augmenting State funds for Panchayats and Municipalities, consider performance based incentives for State reforms and programmes, and review disaster management financing under the Disaster Management Act, 2005.