Image Source : PTI/FILE Prime Minister Narendra Modi chairs a Union Cabinet assembly.
sixteenth Finance Commission: The central authorities accepted the “Terms of Reference” (ToR) of the sixteenth Finance Commission to suggest the ratio for the devolution of taxes between the Centre and states. In addition, it will additionally evaluate financing catastrophe administration initiatives, for 5 years starting April 1, 2026. As per an official assertion, the fee would submit its report for the five-year interval (2026–27 to 2030–31) to the President by October 31, 2025.
The fee will look at present preparations for funding catastrophe administration initiatives as regards to the funds established below the Disaster Management Act, 2005, along with tax devolution and state income augmentation methods. “The Union Cabinet chaired by Prime Minister Narendra Modi has approved the Terms of Reference for the Sixteenth Finance Commission. The 16th Finance Commission’s recommendations, upon acceptance by the government, would cover a period of five years commencing April 1, 2026,” the assertion stated.
The official stated that the Cabinet assembly was held on Tuesday and that the names of the chairperson and members of the sixteenth Finance Commission could be finalised quickly. The Terms of Reference for the sixteenth Finance Commission shall be notified sooner or later.
Commission to make suggestions on key issues
The fee shall make suggestions in issues together with the distribution between the Union and states of web proceeds of taxes that are to be divided between them and the allocation between states of the respective shares of such proceeds.
The fee will suggest concerning the rules that ought to management state grants-in-aid of revenues from the Consolidated Fund of India in addition to the quantities that must be given to the states on this method. Additionally, it will suggest actions required to extend a state’s consolidated fund in an effort to increase the assets of the state’s municipalities and panchayats.
“The commission may review the present arrangements on financing disaster management initiatives, with reference to the funds constituted under the Disaster Management Act, 2005, and make appropriate recommendations thereon,” the assertion added.
About the Finance Commission
It must be talked about right here that the Finance Commission is a constitutional physique that offers options on centre-state monetary relations.
The former fifteenth Finance Commission below NK Singh had really useful that states be given 41 per cent of the divisible tax pool of the Centre through the five-year interval 2021–22 to 2025–26, which is on the identical degree as was really useful by the 14th Finance Commission.
As per the fifteenth Finance Commission, Gross Tax Revenue (GTR) for the 5-year interval is predicted to be Rs 135.2 lakh crore. Out of that, the divisible pool (after deducting cess and surcharges and the price of assortment) is estimated to be Rs 103 lakh crore.
(With inputs from PTI)
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