FINANCE COMMISSION
- October 19, 2020
- Posted by: OptimizeIAS Team
- Category: DPN Topics
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Subject: Polity
Context: Finance Commission chief says that GST cess will continue.
Concept :
- Finance Commission is a constitutional body under Article 280 created every five years to recommend the transfer of financial resources from the Centre to the States.
- The Commission also decides the principles on which grants-in-aid will be given to the States.
- The 15th FC headed by Mr. N.K. Singh and its recommendations, to be observed for a period of five years, will kick in from April 1, 2020.
State Finance Commissions (SFCs)
- The State Finance Commission (SFC) is an institution created by the 73rd and 74th Constitutional Amendments (CAs) to rationalize and systematize State/sub-State-level fiscal relations in India.
- Article 243I of the Constitution mandated the State Governor to constitute a Finance Commission every five years.
- Article 243Y of the Constitution states that the Finance Commission constituted under article 243 I shall also review the financial position of the Municipalities and make recommendations to the Governor.