Meeting for the first time after its constitution last week, the 15th Finance Commission on Monday decided to involve various research organisations across the country.
The committee’s chairman N K Singh said that this would help in engaging all stakeholders to decide on issues which concern not only the Centre, but states as well.
“It will be the endeavour of this commission to involve as many research organisations based in different parts of the country to make them important stakeholders because this commission as mandated by the Constitution is not merely to govern Central government, but on issues that concern the development of states as well,” Singh told reporters after the meeting.
The Commission also discussed the Terms of Reference of the panel and other procedural issues, a finance ministry statement said.
The meeting was attended by Shaktikanta Das, Anoop Singh, Ashok Lahiri and Ramesh Chand, members of the Commission.
“We covered number of issues which need to be addressed. We went over the Terms of Reference (ToR) which have been given to us by the President, and the best ways of addressing those wide ranging ToR, procedures for consultation, the broad structure of ensuring that all stakeholders are fully consulted that particularly in respect of state governments,” Singh said.
The panel will decide on devolution share of states from central taxes as well as suggest measures to augment the Consolidated Fund of a State to supplement the resources of the Panchayats and Municipalities. The panel has been asked to take into account the impact of the GST, including payment of compensation for possible loss of revenues for 5 years, and abolition of a number of cesses, earmarking thereof for compensation and other structural reforms programme, on the finances of Centre and States.
“If we look at the terms of reference these are two frontal issues in the ToR. If you look at Article 280 of the constitution, Article 281 and Article 282 are precisely on those kinds of issues in which the Commission would need to study, analyse, examine, consult before it comes to any conclusion,” Singh said.
When asked if the devolution to states needs to be changed in backdrop of Goods and Services Tax, Singh said, “We did not discuss that, it’s far too premature to comment on an issue of that kind that will require very careful deliberations and consideration.”
The finance ministry statement added that the commission would also involve consultations with stakeholders involving ministries and local bodies. “The Commission was cognizant that it has been assigned wide-ranging ToR which needed to be suitably addressed. Towards this objective, it was felt that wide-ranging consultations with all stakeholders including various ministries of the union government, all state governments, local bodies, panchayats and political parties of each state government needed to be expeditiously initiated,” it said.