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India sets 13th Finance Commission in motion

The President of India has constituted the Thirteenth Finance Commission which would review the state of finances of the union and the states keeping in view the operation of the states’ Debt Consolidation and Relief Facility 2005-2010.

New Delhi: The office of the President of India has announced setting up of the Thirteenth Finance Commission to review the finances of the union and the states keeping in view the operation of the states' Debt Consolidation and Relief Facility (DCRF) 2005-2010.

The commission, to be chaired by former Union Finance Secretary and Adviser to the Finance Minister Vijay L Kelkar, would also suggest measures for maintaining a stable and sustainable fiscal environment consistent with equitable growth, the country's Finance Ministry stated.

The commission would review the present arrangements as regards financing of disaster management with reference to the National Calamity Contingency Fund and the Calamity Relief Fund and the funds envisaged in the Disaster Management Act, 2005.

As in the case of the previous Finance Commissions, the 13th Finance Commission would also take into consideration various aspects while making its recommendations. These relate to assessment of the resources of the centre and the state for the five year period, taxation efforts and the potential of additional revenue mobilization and demands on the resources of the central government.

It would also consider the requirement of states to meet the non-salary component of maintenance expenditure on capital assets and plan schemes, the objective of not only balancing receipts and expenditure but also generating surpluses, and the need to ensure commercial viability of irrigation and power projects, departmental undertakings and public sector enterprises through various means including levy of user charges and adoption of measures to promote efficiency.

The commission would consider the likely impact of the proposed implementation of Goods and Services Act (GST) with effect from April 1, 2010, including its impact on foreign trade, the Ministry said.

The government has asked the 13th Finance Commission to consider the need for improving the quality of public expenditure to obtain better outputs and outcomes.

The need to manage ecology, environment and climate change consistent with sustainable development, which is an issue of national concern would also be taken into account by the 13th Finance Commission.

The recommendations of the Thirteenth Finance Commission will cover the period of five years from April 1, 2010 to March 31, 2015 and the commission is expected to make available its report by October 31, 2009.
—iGovernment Bureau

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