Finance Commission Members & Recommendations

Finance Commission Members & Recommendations

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The Chairman is the Finance Commission of India head and the person must have an experience in public affairs to be deemed fit for the post. The Chairperson runs the body along with four other members. The required eligibility criteria for the members to be selected in the body are either to be a High Court judge, specialty acumen in economics, relevant knowledge of government finance, ample experience in administration or having handled government financial matters. The commission is appointed for five years by the President of India as per Article 280 of the Indian Constitution. Every member of the body can be in office for the period as mentioned in the President’s order and is also eligible for reappointment provided the member has resigned his office by way of a letter to the President.

The Finance Commission of India members Finance Commission of India members can render their part-time or full-time services to the commission, as mentioned by the order of the President. They are paid allowances and salaries according to the provisions of the central government. It is also to be noted here that members can be disqualified from the commission if it is found that a member is mentally unsound, is an undischarged insolvent, has been convicted by a court for an immoral offense and if the financial or other interests hinder the smooth working of the commission.

Thus, the members of theFinance Commission India work coherently and strongly suggest tax revenues between the centre and the states. A major function of it is to sort out the vertical imbalances between expense responsibilities and taxation abilities of the states and the centre. It also makes efforts to maintain the balance between states for public services. The commission also governs the principles of Grants-in-Aid to the states by the centre. However, all recommendations of the commission are advisory and the government is not bound to follow them.

The recommendation of the latest Finance Commission in India includes bringing down the fiscal deficit to 4% of GDP (Gross Domestic Product) by 2025-26, extra yearly borrowing by states that undertake power sector reforms and worth 0.5% of GSDP (Gross State Domestic Product) from 2021-25, strengthening of income and asset-based taxation and resolution of the inverted duty structure between final outputs and intermediate inputs in GST (Goods and Services Tax).