Fourteenth Finance Commission by Sept
The 14th Finance Commission is expected to be set up by September this year. The finance ministry has already started laying the groundwork for the Commission that would decide on the devolution of taxes between the Centre and state governments.
"The Finance Commission requires at least two to three years time to finalise its report, which requires extensive research and deliberations with Central ministries and state governments. It has to be set up by the end of the year," a finance ministry official said.
The Commission's recommendations will stand for the five-year period between 2015-2020.
An amount of Rs 30 lakh has also been earmarked in Budget 2012-13 for setting up an advance cell for the Commission.
'The advance cell will be set up so that it can get basic infrastructure such as office space and staff required for the Commission in place,' the official said.
Simultaneously, the finance ministry will work out the terms of reference as well as shortlist possible members for the high powered panel. 'It is too early in the day to decide on these issues but we will finalise all this in the next five to six months and seek Cabinet approval,' the official added.
The Finance Commission is a statutory body that has to be set up under the Constitution every five years.
Its primary responsibility is to finalise division of taxes and other monetary resources between the Centre and the states along with some other issues relating to public finances.
The Thirteenth Finance Commission was set up in November 2007 and was headed by Vijay Kelkar, former finance secretary and adviser to the finance minister and submitted its report in February 2010.
It recommendations which pertain to the period from 2010-15 include the impact of the proposed goods and services tax on the economy as well as a roadmap for fiscal consolidation.