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15th Finance Commission – Current Affair Update

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Key Points:

    • The chairman of the 15th Finance Commission (FC) is NK Singh.
    • The FC recommends the distribution of taxes between the Centre and the states.
    • The Commission will work on the principles which should govern the grants-in-aid of the revenues of the States out of the Consolidated Fund of India and the sums to be paid to the States by way of grants-in-aid of their revenues under Article 275 of the Constitution.
    • The Commission will also suggest measures to augment the Consolidated Fund of a State to supplement the resources of the Panchayats and Municipalities.
    • Furthermore, the government has tasked the Commission to suggest a fiscal consolidation roadmap for the Centre and the states. 
    • About FC:
      • Finance Commission is a body set up under Article 280(1) of the Indian Constitution.
      • It is formed every five years to recommend principles governing the allocation of tax revenue between the Centre, states and local bodies.
      • Its primary job is to recommend measures and methods on how revenues need to be distributed between the Centre and states.
      • The recommendations of the previous 14th Finance Commission, chaired by former Reserve Bank of India (RBI) Governor Y V Reddy, are valid from 2015 to 2020.
      • The recommendations of the 15th Finance Commission will be implemented for the period starting 1 April 2020 to 31 March 2025.
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