The Tenth Finance Commission of India was incorporated in the year 1992 consisting of Shri

Krishna Chandra Pant Krishna Chandra Pant (10 August 1931 – 15 November 2012) was an Indian Member of Parliament for 26 years and was the prime minister's interlocutor on Kashmir. He was a cabinet minister in the Government of India and held several constitutio ...

as the chairman.

Members

The members of the commission were: * Shri

, Chairman * Dr. Debi Prasad Pal, Member of

Parliament In modern politics, and history, a parliament is a legislative body of government. Generally, a modern parliament has three functions: representing the electorate, making laws, and overseeing the government via hearings and inquiries. Th ...

* Shri B.P.R. Vithal * Dr.

C. Rangarajan Chakravarthi Rangarajan (born 1932) is an Indian economist, a former Member of Parliament and 19th Governor of the Reserve Bank of India. He is the former Chairman of the Prime Minister's Economic Advisory Council, he resigned the day the UPA ...

, resigned on 21 December 1992 * Shri M.C. Gupta, Member Secretary, relinquished charge on 31 January 1994 * Shri Manu R. Shroff, In place of Dr. C. Rangarajan on 14 October 1993 * Shri Arun Sinha, Member Secretary (in place of M.C. Gupta) on 1 March 1994

Recommendations

The commission recommended that: * The share of the Union Territories would not be determined on the grounds used for state share but it would be decided on the basis of

population Population typically refers to the number of people in a single area, whether it be a city or town, region, country, continent, or the world. Governments typically quantify the size of the resident population within their jurisdiction using a ...

solely. The percentage would be 0.927% for the years 1995–2000. * Out of the total income obtained from certain central taxes and duties, 29% should go to the states. This is known as the 'Alternative Scheme of Devolution' and came into effect retrospectively from April 1, 1996. * The proceeds from the ‘penalties’ and ‘interest recovered’ under the miscellaneous receipts should be included in to the divisible

income tax An income tax is a tax imposed on individuals or entities (taxpayers) in respect of the income or profits earned by them (commonly called taxable income). Income tax generally is computed as the product of a tax rate times the taxable income. Tax ...

pool as recommended by Ninth Commission with effect from 1 April 1995. * The share of the net proceeds would be 77.5% for five years. * The commission dropped the collection factor as the criterion for distribution * The distribution of the net proceeds among states would be as follows:- ** 20% on the basis of population of 1971 ** 60% on basis of distance of

per capita income Per capita income (PCI) or total income measures the average income earned per person in a given area (city, region, country, etc.) in a specified year. It is calculated by dividing the area's total income by its total population. Per capita i ...

** 5% on basis of area adjusted ** 5% on basis of infrastructure index ** 10% on basis of tax effort

References

Further References

* * Finance Commission of India 1995 establishments in India {{India-law-stub