Finance Commission to consult states from June
The Thirteenth Finance Commission will start interactions with states from next month, after which it would come out with consultation papers for larger public debate before submitting its final report by October next year.
By PTI |
NEW DELHI: The Thirteenth Finance Commission will start interactions with states from next month, after which it would come out with consultation papers for larger public debate before submitting its final report by October next year.
"We will start state visits from June 1 with Himachal Pradesh," Finance Commission Chairman Vijay Kelkar said.
The commission has already held eight meetings with various bodies, civil servants in different parts of the country, including Delhi, Kolkata, Bangalore, Chennai, Mumbai, he said.
It has also started the process of consultations with political parties for inputs, Kelkar said.
After interacting with states, the Finance Commission will bring consultation papers for comments from the public, he said.
When asked when the concept papers will be out, he said it depends on when will interaction with states be over.
At the moment, only Himachal Pradesh has given time, he said.
The six-member commission is asked to give its recommendations for a period of five years commencing on the April 1, 2010, which is significant since from that date new indirect tax structure in the form of Goods and Service Tax (GST) is expected to be introduced.
For this purpose, the commission is likely to meet representatives of the empowered committee of state finance ministers on VAT.
"We will start state visits from June 1 with Himachal Pradesh," Finance Commission Chairman Vijay Kelkar said.
The commission has already held eight meetings with various bodies, civil servants in different parts of the country, including Delhi, Kolkata, Bangalore, Chennai, Mumbai, he said.
It has also started the process of consultations with political parties for inputs, Kelkar said.
After interacting with states, the Finance Commission will bring consultation papers for comments from the public, he said.
When asked when the concept papers will be out, he said it depends on when will interaction with states be over.
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At the moment, only Himachal Pradesh has given time, he said.
The six-member commission is asked to give its recommendations for a period of five years commencing on the April 1, 2010, which is significant since from that date new indirect tax structure in the form of Goods and Service Tax (GST) is expected to be introduced.
For this purpose, the commission is likely to meet representatives of the empowered committee of state finance ministers on VAT.
The committee has already suggested dual model for GST, which means that both the Centre and states will have the power to levy this tax and there will be separate chains for tax in states and the Union Government. However, the rate of GST is yet to be decided.
Besides GST, the commission is also expected to give its suggestions on distribution of tax proceeds between the union and states, the principle that should decide the grants-in aid to the states out of Consolidated Fund of India.
Its report would also deal with the measures needed to augment the Consolidated Fund of a state to supplement the resources of the panchayats and municipalities.
The commission, set up last November, will review the status of finances of the Centre and states and suggest measures for maintaining a stable and sustainable fiscal environment consistent with equitable growth.
It has already invited suggestions from public on its terms of reference.
Kelkar's predecessor C Rangarajan said the terms of reference of the commission reflect some new concerns and considerations.
He mentioned that the periodic revision of salaries and pensions by a central pay commission has a large impact on the finances of central as well as state governments.
With the Sixth Pay Commission already having submitted its recommendations, and with the state governments likely to follow suit, there will be a substantial impact on the base year and forecast numbers for the 13th Finance Commission, Rangarajan said.
The union exchequer would take a hit of Rs 12,561 crore in 2008-09 if the government decides to implement the Sixth Pay Commission Report, besides Rs 18,060 crore as one-time expenditure on paying arrears from January 1, 2006. However, arrears could be paid in two instalments.
Besides GST, the commission is also expected to give its suggestions on distribution of tax proceeds between the union and states, the principle that should decide the grants-in aid to the states out of Consolidated Fund of India.
Its report would also deal with the measures needed to augment the Consolidated Fund of a state to supplement the resources of the panchayats and municipalities.
The commission, set up last November, will review the status of finances of the Centre and states and suggest measures for maintaining a stable and sustainable fiscal environment consistent with equitable growth.
It has already invited suggestions from public on its terms of reference.
Kelkar's predecessor C Rangarajan said the terms of reference of the commission reflect some new concerns and considerations.
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He mentioned that the periodic revision of salaries and pensions by a central pay commission has a large impact on the finances of central as well as state governments.
With the Sixth Pay Commission already having submitted its recommendations, and with the state governments likely to follow suit, there will be a substantial impact on the base year and forecast numbers for the 13th Finance Commission, Rangarajan said.
The union exchequer would take a hit of Rs 12,561 crore in 2008-09 if the government decides to implement the Sixth Pay Commission Report, besides Rs 18,060 crore as one-time expenditure on paying arrears from January 1, 2006. However, arrears could be paid in two instalments.
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