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2020-02-02

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Indian Polity
www.economictimes.indiatimes.com

The NK Singh-led 15th Finance Commission has recommended reducing states share by 1% from Centre’s divisible pool to 41% in 2020-21 as against 42%, citing reasons of security and special needs of the union territories of J&K and Ladakh.

While there is no change in the formula of devolution, the 1% reduction has been on account of J&K moving out from the state list. The 14 th Finance Commission had modelled for 29 states and had recommended 42% of the Centre’s pool to be devolved to states.

The FC has notionally estimated the share of erstwhile state of Jammu & Kashmir to be around 0.85 of the divisible pool. “We believe that there is a strong case for enhancing this to 1% of the divisible pool in order to meet the security and other special needs of the UTs of J&K and Ladakh,” it said.

“Since this enhancement has to be met from the Union Government’s resources, we recommend that aggregate share of states may be reduced by 1 percentage point to 41% of the divisible pool,” it added.

Fiannce minister Nirmala Sitharaman tabled The 15 th FC report in Parliament on Saturday, ahead of the General Budget. The commission will submit its report for an extended period of 2021-22 to 2025-26 by October 30, 2020. The Cabinet has approved extension of the term of 15 th Finance Commission following abrogation of Article 370 after which J&K became a union territory and thus number of states were remodelled from 29 earlier to 28 now.

The NK Singh-led 15th Finance Commission has recommended reducing states share by 1% from Centre’s divisible pool to 41% in 2020-21 as against 42%, citing reasons of security and special needs of the union territories of J&K and Ladakh.

While there is no change in the formula of devolution, the 1% reduction has been on account of J&K moving out from the state list. The 14 th Finance Commission had modelled for 29 states and had recommended 42% of the Centre’s pool to be devolved to states.

The FC has notionally estimated the share of erstwhile state of Jammu & Kashmir to be around 0.85 of the divisible pool. “We believe that there is a strong case for enhancing this to 1% of the divisible pool in order to meet the security and other special needs of the UTs of J&K and Ladakh,” it said.

“Since this enhancement has to be met from the Union Government’s resources, we recommend that aggregate share of states may be reduced by 1 percentage point to 41% of the divisible pool,” it added.

Fiannce minister Nirmala Sitharaman tabled The 15 th FC report in Parliament on Saturday, ahead of the General Budget. The commission will submit its report for an extended period of 2021-22 to 2025-26 by October 30, 2020. The Cabinet has approved extension of the term of 15 th Finance Commission following abrogation of Article 370 after which J&K became a union territory and thus number of states were remodelled from 29 earlier to 28 now.

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