15th Finance Commission report by October !
The Fifteenth Finance Commission is scheduled to submit its final report by October 2020. Prior to the amendment to the Constitution in the year 2000, only the income tax and union excise duties were sharable with the States while customs and corporate income tax were not sharable.. As an Officer on Special Duty for the Ninth and Tenth Finance Commissions in Tamil Nadu, I found that the Central Government was in the habit of hiking the non sharable customs duty and corporate tax as successive Finance Commissions had increased the share of the States in the Income Tax and the Union Excise Duty from 50 percent to 90 percent. The Centre was also having recourse to various surcharges which were also not sharable. As a result the tax structure in India had become highly skewed.
In an article published in the Economic and Political Weekly in August 1992, I had suggested that all the central taxes including the various taxes and the duties contemplated in Articles 268 and 269 of the Constitution like taxes on advertisements in the radio and newspapers and the States' share should be fixed at 33.33 percent of the Centre's gross tax revenue. I wrote this paper in 1990 while at the IMF .Since I was only on deputation to the IMF from GOI . IMF sought clearance from the MOF. Dr Manmohan Singh the then FM , suggested that I should publish the paper in India after my return. and the was carried by in the EPW in August 1992.
Late KC Pant, Chairman of the 10th Finance Commission, recommended this model to GoI. This was accepted and the Constitution was amended in the year 2000. The level of devolution which was 29.5 percent in 2000-2005 was hiked to 30.5 percent by the 12 th FC and to 32 percent by the 13 th FC.
The 14th FC headed by Dr Y.Venugopal Reddy hiked the percentage to 42 percent which I chose to term as totally irresponsible in an article in the Hindu Business Line ( February 2016.)
With this development we were back to square one by the Centre levying various surcharges. In my view, it is the duty of the Fifteenth FC to do the required damage control in its Final Report .. Though the 15 th FC has made a good beginning by reducing the devolution to 41 percent in its Interim Report it is grossly inadequate and boldly fix the devolution percentage 33.33 percent..
I would also suggest that in order to prevent vertical devolution being to subject to vagaries of Finance Commissions, the TOR for the next FC to be set up in 2022 should include only the horizontal redistribution of devolution among the States and take vertical devolution from the ambit of the Finance Commission.
Dr Sitharam Gurumurthi IAS (Retired)
Former Member State Planning Commission &
Additional Chief Secretary to the Governent of Tamil Nadu
Reduce dominance of IAS officers in DoPT
In continuation of Kumar's ‘irregularities in ACC appointments’, would like to say that unless the dominance of IAS officers in DoPT is reduced, things will not improve. Why is EO and Secretary Personnel manned by IAS officers only ? Hope PM takes note of it and set things right.
S Gopal
A K Sharma continues to be PM’s man
To remain trustworthy to PM is not easy task.
V M Upadhyay
In an article published in the Economic and Political Weekly in August 1992, I had suggested that all the central taxes including the various taxes and the duties contemplated in Articles 268 and 269 of the Constitution like taxes on advertisements in the radio and newspapers and the States' share should be fixed at 33.33 percent of the Centre's gross tax revenue. I wrote this paper in 1990 while at the IMF .Since I was only on deputation to the IMF from GOI . IMF sought clearance from the MOF. Dr Manmohan Singh the then FM , suggested that I should publish the paper in India after my return. and the was carried by in the EPW in August 1992.
Late KC Pant, Chairman of the 10th Finance Commission, recommended this model to GoI. This was accepted and the Constitution was amended in the year 2000. The level of devolution which was 29.5 percent in 2000-2005 was hiked to 30.5 percent by the 12 th FC and to 32 percent by the 13 th FC.
The 14th FC headed by Dr Y.Venugopal Reddy hiked the percentage to 42 percent which I chose to term as totally irresponsible in an article in the Hindu Business Line ( February 2016.)
With this development we were back to square one by the Centre levying various surcharges. In my view, it is the duty of the Fifteenth FC to do the required damage control in its Final Report .. Though the 15 th FC has made a good beginning by reducing the devolution to 41 percent in its Interim Report it is grossly inadequate and boldly fix the devolution percentage 33.33 percent..
I would also suggest that in order to prevent vertical devolution being to subject to vagaries of Finance Commissions, the TOR for the next FC to be set up in 2022 should include only the horizontal redistribution of devolution among the States and take vertical devolution from the ambit of the Finance Commission.
Dr Sitharam Gurumurthi IAS (Retired)
Former Member State Planning Commission &
Additional Chief Secretary to the Governent of Tamil Nadu
Reduce dominance of IAS officers in DoPT
In continuation of Kumar's ‘irregularities in ACC appointments’, would like to say that unless the dominance of IAS officers in DoPT is reduced, things will not improve. Why is EO and Secretary Personnel manned by IAS officers only ? Hope PM takes note of it and set things right.
S Gopal
A K Sharma continues to be PM’s man
To remain trustworthy to PM is not easy task.
V M Upadhyay