Dr. Rajiv Kumar, Vice Chairman of NITI Aayog, emphasizes that the terms of reference for this commission are concise yet cover a broad spectrum of economic considerations.
The commission’s primary task is to recommend the sharing of tax revenue between the Union and state governments for a specified period. This involves assessing the resources, needs, and development disparities among states. The terms also encompass grants-in-aid to states and local bodies, ensuring financial stability and promoting cooperative federalism.
Furthermore, the commission is tasked with recommending measures to augment the consolidated fund of states and the center. It evaluates fiscal discipline, efficiency, and competitiveness in the fiscal management of these entities. The terms underscore the importance of balancing the fiscal needs of different tiers of government while addressing emerging challenges such as climate change and national security.Source:- the economic timesDr. Somanathan, the Finance Secretary, highlights the comprehensive nature of the terms of reference, indicating the need for a nuanced approach to fiscal federalism. This includes devising mechanisms for resource mobilization, exploring avenues for enhancing non-tax revenues, and recommending reforms to promote fiscal sustainability.
In conclusion, the 16th Finance Commission’s terms of reference are succinct yet comprehensive, encompassing a range of economic aspects crucial for equitable fiscal distribution and sustainable development across states in India.Share your views in the comments
