Committee constituted to advise 15th Finance Commission on ToR-related matters

New Delhi [India], May 9 (ANI): The Fifteenth Finance Commission on Wednesday constituted an advisory council to advise and assist them on any issue or subject related to the Terms of Reference (ToR) of the Commission.

This comes more than a month after objections were raised by several state finance ministers to the ToR prescribed by the Commission for allocation of funds to states, and usage of 2011 census data.

As per the Ministry of Finance, the newly-constituted council will assist in the preparation of any paper or research study, which would enhance the Commission's understanding of the issues containing in its ToR; and help in broadening the Commission's ambit and understanding to seek best national and international practices on matters pertaining to fiscal devolution and improving the quality and reach and enforcement of its recommendations.

The Council will be led by Arvind Virmani, President of the Forum for Strategic Initiatives, and will include Surjit S. Bhalla, part-time member of the Economic Advisory Council to the Prime Minister (PMEAC) and Chairman of Oxus Research and Investments, Sanjeev Gupta, Ex-Deputy Director (Fiscal Affairs Department) of the International Monetary Fund (IMF), Pinaki Chakraborty, Professor at the National Institute of Public Finance and Policy (NIPFP), Sajjid Chinoy, Chief India Economist at JP Morgan, and Neelkanth Mishra, Managing Director and the Credit Suisse India Economist and Strategist.

Earlier, the finance ministers of around 11 Indian states in subsequent meetings had highlighted loopholes in the ToR prescribed by the Commission for allocation of funds to states.

The finance ministers of Kerala, Karnataka, Andhra Pradesh and Puducherry, who attended a conclave, argued that with the present guidelines in place, states with higher population would be entitled to a larger share of tax resources, while those that undertook measures for population control would incur losses. They also demanded an increase in power to state governments, as they were primarily responsible for undertaking developmental activities.

The 15th Finance Commission, which was set-up in November 2017, recognised population as an important criterion for distribution of taxes. The body had said that it would use data from the 2011 census while making recommendations for the five-year period, which begins in 2020.

However, the southern Indian states, barring Telangana, wanted the recommendations to be based on the 1971 census data. They also raised concerns over the population-based formula for tax sharing between the Centre and states. (ANI)

This story has not been edited. It has been published as provided by ANI