ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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Global Downturn and the Thirteenth Finance Commission

In the current uncertain fiscal situation following the global downturn, the Thirteenth Finance Commission is constrained in making a realistic assessment of the resources and expenditure needs of the centre and the states. Past experience clearly indicates that in a fiscal crisis resource transfers to states will witness a contraction and it would be unfair to bind the states to such a dispensation for five years. In view of the current uncertainties, the THFC should be asked to give its recommendations for two instead of five years. Such a course of action will also result in the synchronisation of the term of the Finance Commission and the period of the five-year plans, and will help address the uncertainty arising from the proposed introduction of Goods and Services Tax from 2010.

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