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NK Singh, chairman of the 15th Finance Commission, interviewed by Zia Haq (Hindustan Times)

-Hindustan Times

The chairman of the 15th Finance Commission, NK Singh, spoke to Zia Haq about the final report of the Commission for 2021-26 which has now been made public. Edited excerpts.

The Constitution, through Article 280 to 281, provides for finance commissions every five years as a mechanism for sharing of taxes and revenues vertically between the Centre and states; and horizontally among all states, based on levels of development, demographic outcomes, prosperity and regional needs.

The final report of the 15th Finance Commission for 2021-26 has now been made public. The Union government, in its action taken report on the commission’s report tabled in Parliament, has accepted most of the recommendations, and overtly rejected none. The 15th FC had the onerous task of devolving resources at a time when the pandemic has devastated the economy, shrinking the resource pie. The chairman of the 15th FC, NK Singh, spoke to Zia Haq about the report. Edited excerpts:

* What were the philosophical underpinnings and approach of the 15th FC? Your report states that “stability and predictability of resources is an essential component of good long-term budgeting for both Union and States”.

The history of the Finance Commission is embedded in the legacy of unalloyed confidence and trust. When the Constituent Assembly in its debates was unable to come to a conclusion of how the resources were to be divided between the Union and states, various mechanisms were considered at that time. Earlier it was said that nothing was shareable, except income tax, and you know the finance commission in a sense is older than our Constitution, because the Independence was in 1947, whereas the Constitution came into play only in 1950. So, there was a period they had appointed an interim chairman of the finance commission under CD Deshmukh because the Constituent Assembly had asked him to do it. He had given a certain framework on the division of resources. Then the Constitution got adopted and the 1st FC under KC Neogi was constituted. Since then it has had an unbroken legacy, an unbroken record embedded in bipartisanship, fair play and has been totally ideologically neutral.

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Image Courtesy: Hindustan Times/ Sonu Mehta