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Prime Minister Narendra Modi chaired Union Cabinet has approved the extension of the term of Fifteenth Finance Commission up to November 30, 2019.
It will enable the Commission to examine various comparable estimates for financial projections in view of reforms and the new realities to finalise its recommendations for the period 2020-2025. The Commission has been constituted by the President on November 27, 2017 in ' pursuance of clause (1) of article 280 of the Constitution and Finance Commission (Miscellaneous Provisions) Act, 1951.
The Commission was to submit its Report on the basis of its Terms of Reference (ToR) by October 30, 2019 covering a period of five years commencing from April 01, 2020. As per the press report, the constitution of the Commission has been in the backdrop of various major fiscal/budgetary reforms introduced by the Union Government in the past four years like closure of the Planning Commission and its replacement by NITl Aayog, removal of distinction between Non-Plan and Plan expenditure, advancing the budget calendar by one month and passing of the full budget before commencement of the new financial year i.e. on 1st February, introduction of Goods and Services Tax (GST) from July 2017 and New FRBM architecture with debt and fiscal deficit path.
Terms of Reference of the Commission takes into account the above fiscal/budgetary reforms. The task of determining the expenditure and receipts of the Union and State governments based on which the Commission shall make its recommendations is time consuming, as checks for data consistency across time and data sets become challenging.