By IANS
New Delhi : The government Wednesday constituted the 13th Finance Commission with former finance secretary and economist Vijay L. Kelkar as its chairperson, to primarily suggest how taxes should be distributed between the central and state governments.
The commission’s recommendations will govern how grants and aid are given to states out of the consolidated fund of India towards administrative expenses.
The commission’s suggestions – expected by Oct 31, 2009 – will cover a five-year period from April 1, 2010 to March 31 2015, an official statement said.
The panel – set up every five years by the president of India as required by the Constitution – has three full-time members and serving bureaucrat Sumit Bose as its member secretary.
The members are Indira Rajaraman, professor emeritus of the National Institute of Public Finance and Policy, Abusaleh Shariff, chief economist of the National Council of Applied Economic Research and Atul Sarma, former vice-Chancellor of the Rajiv Gandhi University.
The commission will also review finances of the Union government and states, keeping in mind their current levels of debt. It will suggest measures to maintain a stable fiscal environment that is consistent with equitable growth.
“The 13th Finance Commission will also review the present arrangement as regards financing of disaster management with reference to National Calamity Contingency Fund and the Calamity Relief Fund,” the statement said.
It will also suggest how to ensure commercial viability of developmental projects in areas like irrigation and energy through various means, including levy of user charges and adoption of measures to promote efficiency.
The commission has been mandated to consider likely impact of the Goods and Services Act expected to take effect April 1, 2010, especially on foreign trade.
“The need to manage ecology, environment and climate change consistent with sustainable development, which is an issue of national concern, will also be taken into account by the 13th Finance Commission,” the statement added.