Relevance: G.S paper II: Governance
Context
- Chairman of the Fifteenth Finance Commission N K Singh submitted the interim report of the Commission to President Ram Nath Kovind for the financial year 2020-21 for further necessary action.
News summary
- The 15th Finance Commission submitted its interim report on devolution formula for the financial year 2020-21 to President Ram Nath Kovind.
- The devolution formula spells out how the Centre plans to share the taxes collected by it with the States. Since, the formula is to be applied in the new Budget, the award has not been made public.
- Now, the report will first be studied and then a final view will be taken by the Cabinet following which it will be tabled in Parliament just before the Union Budget next year. Only after that will the contents be made public.
- Normally, the government accepts the award in toto, however, it is free to accept or reject other suggestions in the report.
Background:
- The 15th Finance Commission was constituted by the President under Article 280 of the Constitution on November 27, 2017 to make recommendations for a five-year period from April 1, 2020 to March 31, 2025.
- The Commission had a wide ranging Terms of Reference (ToR) contained in the Presidential Notification.