The Thirteenth Finance Commission of India was constituted by the
President of India
under the chairmanship of
Vijay L. Kelkar on 13 November 2007.
Members
Members of the Commission were:
* Dr. Vijay L. Kelkar, Chairman
* Shri
B. K. Chaturvedi, Part-time
* Dr.
Indira Rajaraman
* Prof.
Atul Sarma
* Dr.
Sanjiv Misra
* Shri
Sumit Bose, Secretary
Recommendations
The major recommendations of the Commission were:
# The share of states in the net proceeds of the shareable
Central
Central is an adjective usually referring to being in the center of some place or (mathematical) object.
Central may also refer to:
Directions and generalised locations
* Central Africa, a region in the centre of Africa continent, also known as ...
taxes should be 32%. This is 1.5 percentage-points higher than the recommendation of the
12th Commission.
#
Revenue deficit to be progressively reduced and eliminated, followed by revenue surplus by 2013–2014.
#
Fiscal deficit
The government budget balance, also alternatively referred to as general government balance, public budget balance, or public fiscal balance, is the overall difference between government revenues and spending. A positive balance is called a ''g ...
to be reduced to 3% of the
gross domestic product
Gross domestic product (GDP) is a money, monetary Measurement in economics, measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjec ...
(GDP) by 2014–2015.
# A target of 68% of GDP for the combined debt of centre and states.
# The
Medium Term Fiscal Plan (MTFP) should be reformed and made the statement of commitment rather than a statement of intent.
#
Fiscal Responsibility and Budget Management Act, 2003
The Fiscal Responsibility and Budget Management Act, 2003 (FRBMA) is an Act of the Parliament of India to institutionalize financial discipline, reduce India's fiscal deficit, improve macroeconomic management and the overall management of the pu ...
need to be amended to mention the nature of shocks which shall require targets relaxation.
# Both centre and states should conclude 'Grand Bargain' to implement the model Goods and Services Act (GST).(Task force recommended single positive GST rate of 12% comprising 5% CGST and 7% SGST ) To incentivise the states, the commission recommended a sanction of the grant of Rs500 billion.
# Initiatives to reduce the number of Central Sponsored Schemes (CSS) and to restore the predominance of formula-based plan grants.
# States need to address the problem of losses in the power sector in time bound manner.
References
Further References
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{{Finance Commission of India
Finance Commission of India
2007 establishments in India