The earlier Finance Commission submitted its report on November 9, 2020, for the 5 fiscals — 2021-22 to 2025-26 — to the President. (Representative picture)
The members of the fee and its Terms of Reference are being labored out, says report
The authorities is probably going to arrange the 16th finance fee this yr to counsel, amongst different issues, the ratio through which tax is to be divided between the Centre and states for 5 years, starting April 1, 2026, an official mentioned. The members of the fee and its Terms of Reference (ToR) are being labored out, the official added. The Finance Commission is a constitutional physique that provides recommendations on Centre-state monetary relations.
The earlier Finance Commission submitted its report on November 9, 2020, for the 5 fiscals — 2021-22 to 2025-26 — to the President. The fifteenth Commission below N Okay Singh had saved the tax devolution ratio at 42 per cent — on the identical degree recommended by the 14th Commission. The central authorities accepted the report of the fee, and accordingly, the states are being given 42 per cent of the divisible tax pool of the Centre in the course of the interval 2021-22 to 2025-26.
The fifteenth finance fee’s suggestions embody the fiscal deficit, debt path for the Union and states, and extra borrowing room to states primarily based on efficiency in energy sector reforms. As per the glide path for fiscal consolidation, the federal government goals to deliver down the fiscal deficit to 4.5 per cent of gross home product (GDP) by the 2025-26 fiscal.
For the present fiscal, the deficit is projected at 5.9 per cent of GDP, decrease than 6.4 per cent within the final fiscal ended March 31, 2023.
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