BY:- HEMANT MAHAVER

FINANCE COMMISSION OF

INDIA

INTODUCTIONThe Finance Commission India was officially structured and implemented as per the provisions of the Acts and Rules in the year 1951. The President of India selects the commissioner and the four other members of the Finance Commission India. Further, the President of India assigns the term of their office and their responsibilities. The commissioner and the four members of the Finance Commission India are answerable for their act of commission and omission, directly to the President of India.

The process of selection of Finance Commission India

• The President of India shall, within maximum of two years from the commencement of the draft and thereafter completion of every fifth year or at earlier time , by order should constitute a Finance Commission

• The Finance Commission shall consist of a chairman and four other members, appointed by the President himself

• The elected parliament may by formulating appropriate law determine the qualifications of such members of the Finance Commission and it may also determine the manner in which the members shall be selected

The Qualification of the commissioner and other members

• The Chairman shall be a person with experience in public affairs, and the four other members shall be selected from among persons who--

• Have been, or are qualified to be appointed as Judges of a High Court or

• Have special knowledge of the finances and accounts of Government or

• Have wide experience in financial matters and in administration or

• Have special knowledge of economics

Disqualifications of a member of the Commission

• Unsound mind• Undischarged debts• Convicted of an offense involving moral

turpitude• Financial or other interest as is likely to be

prejudicial to his functions

The duties of the Finance Commission India

• Distribution of the income of the government as per proportion or according to the contribution made towards such collection of revenues by each such state governments or central government

• Define the grounds on which the government should allocate the grants-in-aid of the revenues of the Indian states out of the consolidated fund of India. The quantum of allocation of such funds needs to compliment the requirements of the Municipalities in the State and the resources of the Finance Commission of the State.

• Any other matter referred to the Commission by the President in the interests of sound finance

• The Finance Commission of India shall also determine the operational process and is vested with such powers in the operation as per the provisions enacted by the parliament of India

Indian finance commission actThe India Finance Commission Act was drafted to give a structured format to the Finance Commission of India as per the world standard. Actually, the British rulers felt the need for a commission for guiding the Finance of India during the late 1660. The basic structure of the modern day India Finance Commission Act was laid down during the British rule in the early 1920s. The basic structure of the finance commission India was drafted to ward-off the eminent danger of rising business rivalry from other European countries and to prolong the dominance of British rule in India.

The Finance Commission (Miscellaneous Provisions) Act, 1951 defines the qualification, appointment, disqualification, term, eligibility, service, salaries and powers of the Finance Commission.

The latest provisions of the India Finance Commission Act, 1951

Short title - This Act may be called the Finance Commission (Miscellaneous Provisions) Act, 1951.

Definition - In this Act, "the Commission" means the Finance Commission constituted by the President pursuant to clause (1) of article 280 of the Constitution.

Personal interest to disqualify members

• Before appointing, the President shall satisfy himself that the appointee have no such financial or other interest which may be prejudicial to his duties

• The President shall also satisfy from time to time with respect to every member that he has no such interest and any other member, or any future appointee

• A member shall, whenever required by the President should furnish him such information as the President considers necessary for the evaluation of performance

Term of office of members and eligibility for reappointment

The President shall specify the term period of holding offices to each member. The member shall be eligible for reappointment, until he may, by letter addressed to the President, resign from his office.

Service and salaries

The members shall discharge whole-time or part-time service as the President may fix, and they hall be paid such fees or salaries and such allowances as the Central Government may, by rules determine.

Procedure and powers

• The Commission shall determine their procedure and shall have all the powers of a civil court as per the Code of Civil Procedure, 1908 (5 of 1908). Further, it can also summon and enforce the attendance of witnesses, ask for production of any such related document, and ask for any public record or document from any court or office

• Shall have power to ask any person to furnish information or document on such points or matters as it may feel necessary be useful or relevant to such proceedings

• Shall be deemed to act as a civil court for discharging its duties

Finance Commissions

AppointedFinance Commission

Year of Establishment Chairman Operational Duration

First 1951 K.C Neogy 1952-57

Second 1956 K.Santhanam 1957-62

Third 1960 A.K. Chanda 1962-66

Fourth 1964 P.V. Rajamannarr 1966-69

Fifth 1968 Mahaveer Tyagi 1969-74

Sixth 1972 K. Brahmananda Reddy 1974-79

Seventh 1977 J.M. Shellet 1979-84

Eighth 1983 Y.B. Chavan 1984-89

Ninth 1987 N.K.P.Salve 1989-95

Tenth 1992 K.C Pant 1995-2000

Eleventh 1998 A.M.Khusro 2000-2005

Twelfth 2003 C.Rangarajan 2005-2010

Thirteenth 2007 Vijay l kelkar 2010-2015

Thirteenth finance commission

The Thirteenth Finance Commission came into power in the year 2010. The President of India under the chairmanship of Dr. Vijay L. Kelkar will head it. The Thirteenth Finance Commission of India will focus deeply on making suggestions for people coming from various places.

The Government will cut its fiscal deficit to 3% of the GDP by the end of fiscal year 2013-14 and eliminate its revenue deficit in 2014-15, according to the key recommendations of the 13th Finance Commission. The fiscal deficit is estimated at 5.7% in the year ending on March 2011, and will fall further to 4.8% in the year 2011-12, a 13th Finance Commission said. The report of the 13th Finance Commission, said that the fiscal deficit should drop to 4.2% in 2012-13 and to 3% in 2013-14. Finance Minister Pranab Mukherjee said that the Government has accepted all major suggestions of the 13th Finance Commission. The Centre must cap its total debt at 68% of the GDP by the end of financial year 2014-15.

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Thirteenth Finance Commission at a glance

The thirteenth finance commission decided to provide a notification on 13th November 2007 apropos the terms of reference from the members that include general public, Institutions, and Organizations. Its chief areas of concern are to make recommendations for a range of issues, which will be commenced from 1st April 2010.

The thirteenth finance commission will make recommendations on the distribution of the net proceeds of taxes between the Union and the states, rules that govern the grants-in-aid for states, and actions to be taken in order to increase the Consolidated Fund of India. It will also review the financial condition of the states with respect to debt consolidation and relief fund expenditure. The commission will evaluate the arrangements made to overcome the crisis emerging out from calamities as well.

Undertakings of the Thirteenth Finance Commission

• Make recommendations for sharing of tax revenues between the Union and the states

• Make recommendations for the grants-in-aid provided to the states to raise their income

• Make recommendations for various schemes designed to raise the Consolidated Fund of India

• Review the financial status of the states in terms of debt consolidation and relief fund expenditure

• Evaluate the arrangements made by Central Government as a safety net against calamities and make recommendations thereon

• Provide the details of the sources of its findings and thereby present the estimates of the expenditures carried out by the Union and the states

•Accept any kinds of advice from people from various organizations•Assess the resources provided by the Central Government based on tax levels as well as non-tax revenues•Judge the basic requirements of the states for government resources on account of civil administration, defense, internal and border security, servicing of debts, and other expenditures and liabilities•Balance expenditure and receipts of income as well as generate extra revenue for capital investment•Assess the taxation efforts made by Central Government to ensure mobilization of resources for states•Improve the public expenditure methods

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Conclusion

&Thank you

REAL INDIA