| What duties are outlined in Article 280(3) of the Constitution? | the duties of the Finance Commission | Article 280(3) stipulates the duties of the Finance Commission and, accordingly, each Commission is required to make recommendations on: (i) the distribution between the Union and the States of the net proceeds of taxes which are to be, or may be, divided between them under Chapter I, Part XII of the Constitution; (ii) allocation between the States of the respective shares of such proceeds; (iii) the principles which should govern the grants-in-aid of the revenues of the States out of the Consolidated Fund of India and the sums to be paid to the States by way of grants-in- aid of their revenues under Article 275 of the Constitution for purposes other than those specified in clause (1) of that article; (iv) measures needed to augment the Consolidated Fund of a State to supplement the resources of the panchayats and municipalities in the State on the basis of the recommendations made by the Finance Commission of the State; and (v) any other matter referred to it in the interests of sound finance. | 26 | definition | 1.000 | Article 280(3) stipulates the duties of the Finance Commission and, accordingly, each Commission is required to make recommendations on: (i) the distribution between the Union and the States of the net proceeds of taxes which are to be, or may be, divided between them under Chapter I, Part XII of the Constitution; (ii) allocation between the States of the respective shares of such proceeds; (iii) the principles which should govern the grants-in-aid of the revenues of the States out of the Consolidated Fund of India and the sums to be paid to the States by way of grants-in- aid of their | 8 | page=8,block=0 | 0.700 | valid |
| What did Kunzru believe federation entails regarding wealth distribution? | there should be a transfer of wealth from the richer to the poorer provinces | Pandit Kunzru further said: “…..if federation means anything, it means that there should be a transfer of wealth from the richer to the poorer provinces; just as the very concept of social welfare implies that there should be a transfer of wealth from the richer to the poorer people, so the concept of federation, the concept of national solidarity implies that the richer provinces should part with a portion of what may, in strict theory, due to them, for the benefit of the poorer Provinces. ... I was amazed to find that any committee of experts could propose such a basis for the distribution of the provincial share. I think that it is a matter for satisfaction that the Government of India have rejected the recommendations of the Expert Committee which would have placed them in a dangerous position.” Kunzru did not agree with the point made by Saxena. | 76 | definition | 1.000 | Pandit Kunzru further said: “…..if federation means anything, it means that there should be a transfer of wealth from the richer to the poorer provinces; just as the very concept of social welfare implies that there should be a transfer of wealth from the richer to the poorer people, so the concept of federation, the concept of national solidarity implies that the richer provinces should part with a portion of what may, in strict theory, due to them, for the benefit of the poorer Provinces. |
| What is the purpose of the grants-in-aid related to the upgradation of administration standards? | for upgradation of the standards of administration | (b) Grants-in-aid for upgradation of standards of administration- Government have accepted the Commission’s recommendations for making grants-in-aid to certain States for upgradation of the standards of administration, equivalent to the revenue and capital provisions which the Commission has recommended, subject to the implementation and the monitoring of the upgradation schemes in the manner indicated by the Commission in Chapter 10 of its Report. (c) Grants-in-aid to compensate States’ loss in excise revenue consequent upon introduction of prohibition- Government of India had decided to compensate the States in each of the years 1978-84, by way of grants-in-aid, to the extent of one-half of the established loss of State excise revenue on the introduction of prohibition treating the actual excise revenue of 1977-78 as the base. | 167 | definition | 1.000 | (b) Grants-in-aid for upgradation of standards of administration- Government have accepted the Commission’s recommendations for making grants-in-aid to certain States for upgradation of the standards of administration, equivalent to the revenue and capital provisions which the Commission has recommended, subject to the implementation and the monitoring of the upgradation schemes in the manner indicated by the Commission in Chapter 10 of its Report. |
| What recommendations require an Order of the President for implementation? | those to be implemented by Order of the President | Implementation The Commission’s recommendations fall into three categories, (i) those to be implemented by Order of the President, (ii) those to be implemented by law of Parliament, and (iii) those to be implemented by executive orders. The recommendations under articles 270 and 275(1) of the Constitution (relating to income tax and grants-in-aid respectively) fall in the first category and the necessary Order will be submitted to the President for approval. Recommendations relating to distribution of Union duties of excise, Additional duties of excise and Estate duty on property other than agricultural land fall in the second category. Necessary legislation will be promoted to implement them. | 80 | definition | 1.000 | Implementation The Commission’s recommendations fall into three categories, (i) those to be implemented by Order of the President, (ii) those to be implemented by law of Parliament, and (iii) those to be implemented by executive orders. | 54 | page=54,block=4 | 0.700 | valid |
| What principle is introduced by the recommendation for addressing deficits in states? | directly linking devolution to deficit rather than dealing with them only through grants- in-aid under Article 275 | It may be noted that the Commission has recommended that 5 per cent of the net proceeds of Union duties of excise (excluding that on electricity) should be set aside and distributed to those States which have deficit after taking into account their shares from the devolution of taxes and duties as proposed by it. This introduces a new principle of directly linking devolution to deficit rather than dealing with them only through grants- in-aid under Article 275. While recognising that there could be different views on the merits of this principle, Government have decided to accept this recommendation of the Commission in the Report but without creating a precedent. B. GRANTS-IN-AID OF THE REVENUES OF STATES UNDER THE SUBSTANTIVE PROVISION OF ARTICLE 275 OF THE CONSTITUTION 7. | 350 | definition | 1.000 | This introduces a new principle of directly linking devolution to deficit rather than dealing with them only through grants- in-aid under Article 275. | 61 | page=61,block=9 | 0.700 |
| What was the objective of grants-in-aid provided under Article 275(1) of the Constitution? | towards meeting their non- Plan revenue gap | GRANTS-IN-AID OF THE REVENUES OF STATES UNDER THE SUBSTANTIVE PROVISIONS OF ARTICLE 275 OF THE CONSTITUTION (i) Grants-in-aid to cover non-Plan gap on Revenue Account The Government has accepted the recommendations contained in the Report of the Commission for payment of grants-in-aid of the revenues of certain States under the substantive provisions of Article 275(1) of the Constitution towards meeting their non- Plan revenue gap as assessed by the Commission for the five years 1995-2000. | 391 | definition | 1.000 | GRANTS-IN-AID OF THE REVENUES OF STATES UNDER THE SUBSTANTIVE PROVISIONS OF ARTICLE 275 OF THE CONSTITUTION (i) Grants-in-aid to cover non-Plan gap on Revenue Account The Government has accepted the recommendations contained in the Report of the Commission for payment of grants-in-aid of the revenues of certain States under the substantive provisions of Article 275(1) of the Constitution towards meeting their non- Plan revenue gap as assessed by the Commission for the five years 1995-2000. | 75 | page=75,block=12 | 0.700 | valid |
| What does Article 280 of the Constitution state about the timing of Finance Commission formation? | The Finance Commission are constituted by the President after every five years or earlier | 2. The Report of the Eleventh Finance Commission (hereinafter referred to as the Commission) covering the five years period commencing from April 1, 2000 together with the Explanatory Memorandum on the action taken on the recommendations of the Commission is being laid on the Table of the House, in pursuance of Article 281 of the Constitution. A summary of the Commission’s main recommendations relating to devolution of taxes and duties to the States, grants-in-aid under Article 275 of the Constitution, financing of relief expenditure and debt relief to the States and other matters is contained in Chapter XIV of the Report of the Commission. 3. The Finance Commission are constituted by the President after every five years or earlier under Article 280 of the Constitution to give recommendations on specified aspects of Centre-State fiscal relations. | 652 | definition | 1.000 | 3. The Finance Commission are constituted by the President after every five years or earlier under Article 280 of the Constitution to give recommendations on specified aspects of Centre-State fiscal relations. | 83 |
| What is the nature of the recommendations in the Interim Report? | provisional and of interim nature | th Finance Commission (1984-89) 5. The recovery of small savings loans given to State Governments which was held in abeyance during the period 1979-80 to 1983-84 may be deferred during the financial year 1984-85 also. 6. In its present assessment the Commission has not made provision for expenditure on fresh proposals for upgradation of standards of administration and improvements, if any, needed for the maintenance and up-keep of capital assets and these will be made in the final report. 7. The recommendations contained in the Interim Report are provisional and of interim nature and would be subject to such re-adjustments as may be necessary on the basis of the final report. Explanatory Memorandum as to the action taken on the recommendations made by the Eighth Finance Commission in its Report submitted to the President on 30th April, 1984 1. | 553 | definition | 1.000 | The recommendations contained in the Interim Report are provisional and of interim nature and would be subject to such re-adjustments as may be necessary on the basis of the final report. | 61 | page=61,block=1 | 0.700 |
| What broader mandate does the Eleventh Finance Commission have? | to look into the overall macro-economic balance | While we have gone out of our way to help State Government, the determination shown by some States to deal with these issues has also helped enormously. It will be my endeavour to take further collective measures in the next year for promoting fiscal reforms in the States. The final report of the Eleventh Finance Commission will provide valuable inputs for taking policy initiatives in this regard. The Commission has a broader mandate to look into the overall macro-economic balance. The Commission has indicated in the interim report that it is preparing a scheme of restructuring the government finances so as to restore the fiscal balance. | 438 | definition | 1.000 | The Commission has a broader mandate to look into the overall macro-economic balance. | 82 | page=82,block=5 | 0.700 | valid |
| What is the proposed name for the fund created for calamity relief from surcharge collections? | National Calamity Contingency Fund (NCCF) | Collection from such surcharge should be kept in a separate fund, to be known as National Calamity Contingency Fund (NCCF), created in the public Account of the Government of India. The Commission has also recommended that Government of India should contribute an initial core amount of Rs. 500 crore to this fund so that funds for initial operations are readily available. drawls from the fund should be accompanied by imposition of the special surcharge so that it is immediately recouped. Any balance left from the collection of the surcharge, after meeting the exigency for which it was collected, should be credited to the fund and not treated as a resource for meeting the budgetary expenditure. In order to ensure that there is no delay in the flow of funds to the States for administration of relief, a legislation enabling the Central Government to levy surcharge may be enacted. | 81 | definition | 1.000 | Collection from such surcharge should be kept in a separate fund, to be known as National Calamity Contingency Fund (NCCF), created in the public Account of the Government of India. | 84 | page=84,block=5 |