ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Fifteenth Finance Commission Recommendations

An Appraisal

While trying to balance the competing demands from the union and the states, the Fifteenth Finance Commission has done a commendable job, but has also sacrificed objectivity at times.


Six Hindi-belt statesUttar Pradesh (UP), Madhya Pradesh, Bihar, Jharkhand, Rajasthan, and Chhattisgarh, which together account for 42.85% of Indias population as per the 2011 Censuswould be getting 48.57% of the sharable pool of the union government taxes during 202126, as per the recommendations of the Fifteenth Finance Commission. The five southern statesTamil Nadu (TN), Karnataka, Kerala, Andhra Pradesh, and Telanganawith a population share of 21.32% will get 15.8% of the sharable taxes, while the seven western, eastern, and northern states, which contribute 30.61% of the population would get 25.31%. The eight north-eastern states and two Himalayan states (Uttarakhand and Himachal Pradesh)the earlier special category states sans Jammu and Kashmir (J&K), which no longer is a stateaccounting for only 5.32% of population would get 10.48% of the tax transfers. This, in a nutshell, is the summary of the recommendations of the Fifteenth Finance Commission whose report was laid on the table of Parliament along with the 202122 budget papers, but was somehow eclipsed in the media by the exaltation in the stock market produced by the finance ministers no-tax budget.

The final report of the Fifteenth Finance Commission is aptly titled Finance Commission in COVID TimesReport for 202126. Appointed in 2018 for giving recommendations covering the period 202025, the commissions term was extended by one year in November 2019 after the bifurcation of the state of J&K in August 2019. The commission, therefore, gave an interim report for 202021 in February 2021 to enable devolution of taxes and grants to the states for that year. The final report was submitted in November 2020. Only once before in the history of the finance commissions, the Ninth Finance Commission had submitted two reports.

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Published On : 17th Jan, 2024

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