Cabinet approves Amendment in the Terms of Reference for the Fifteenth Finance Commission

Provision to address concerns regarding funds for defence and internal security

The Union Cabinet chaired by Prime Minister Narendra Modi has approved the proposed amendment to enable Fifteenth Finance Commission to address serious concerns regarding the allocation of adequate, secure and non-lapsable funds for defence and internal security of India.

The Fifteenth Finance Commission has been constituted by the President on 27^th November, 2017 in pursuance of clause (1) of article 280 of the Constitution and Finance Commission (Miscellaneous Provisions) Act, 1951. In keeping with this requirement, the Fifteenth Finance Commission (XV-FC) has been constituted for giving recommendations for the five years period commencing 1st April, 2020.

Under the Terms of Reference (ToR) of the Commission, it is proposed to ensure an assured allocation of resources towards defence and internal security imperatives.

The amendment provides that Fifteenth Finance Commission shall also examine whether a separate mechanism for funding of defence and internal security ought to be set up and if so how such a mechanism could be operationalized.

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AKT/PK/SH

Funding for defence and internal security: Fifteenth Finance Commission to examine assured, non lapsable allocation and separate funding mechanism. Cabinet amended the Fifteenth Finance Commission Terms of Reference directing the Commission to ensure an assured allocation of resources for defence and internal security, to consider making those allocations secure and non lapsable, and to examine whether a separate funding mechanism should be created and how it could be operationalized within the Commission's mandate.