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LATEST NEWS UPDATES | New Finance Commission may penalise states for bad show in schemes -Subhomoy Bhattacharjee

New Finance Commission may penalise states for bad show in schemes -Subhomoy Bhattacharjee

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published Published on Dec 2, 2017   modified Modified on Dec 2, 2017
-Business Standard

The Commission says incentives for states will be decided, among others, by "control or lack of it in incurring expenditure on populist measures"

New Delhi:
States offering debt waivers or slipping on centrally funded programmes, such as Swacch Bharat, could get penalised, according to the terms set for the 15th Finance Commission.

The terms of reference of the Commission, set up by the central government this week, makes these conditions explicit. These yardsticks are new and stringent than the terms of earlier FCs, say experts associated with the earlier ones. FCs are set up every five years by the central government, a requirement of the country’s Constitution, to decide how tax revenues should be shared between the two layers of government.

After the Planning Commission was wound up in 2014, the responsibility to allocate non-tax revenues has also come under the Commission's purview.

The gazette notification for the 15th FC, to be chaired by N K Singh, former MP and erstwhile secretary to former Prime Minister Atal Bihari Vajpayee, says incentives for states will be decided, among others, by “control or lack of it in incurring expenditure on populist measures.” Simultaneously, the Commission could reward a state for “progress made in sanitation, solid waste management and bringing in behavioural change to end open defecation”.

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Business Standard, 2 December, 2017, http://www.business-standard.com/article/economy-policy/states-might-be-penalised-for-slipping-on-fiscal-front-117120200044_1.html


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