TERMS OF
REFERENCE OF THE THIRTEENTH FINANCE COMMISSION
The Commission shall make recommendations as to the following matters, namely :-
(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 and the allocation between the States of the
respective shares of such proceeds;
(ii) 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 which are in need of assistance by way of grants-in-aid of their revenues
under article 275 of the Constitution for purposes other than those specified in the
provisos to clause (1) of that article; and
(iii) the 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.
2.
The Commission shall review the state of
the finances of the Union and the States, keeping in view, in particular, the operation of
the States’ Debt Consolidation and Relief Facility 2005-2010 introduced by the
Central Government on the basis of the recommendations of the Twelfth Finance Commission,
and suggest measures for maintaining a stable and sustainable fiscal environment
consistent with equitable growth.
3.
In making its recommendations, the
Commission shall have regard, among other considerations, to -
(i)
the resources of the Central Government, for five
years commencing on 1st April 2010, on the basis of levels of taxation and non-tax
revenues likely to be reached at the end of 2008-09;
(ii) the demands on the resources of
the Central Government, in particular, on account of the projected Gross Budgetary Support
to the Central and State Plan, expenditure on civil administration, defence, internal
and border security, debt-servicing and other committed expenditure and
liabilities;
(iii) the resources of the State
Governments, for the five years commencing on 1st April 2010, on the basis of levels of
taxation and non-tax revenues likely to be reached at the end of 2008-09;
(iv) the objective of not only balancing
the receipts and expenditure on revenue account of all the States and the Union, but also
generating surpluses for capital investment;
(v) the taxation efforts of the
Central Government and each State Government and the potential for additional resource
mobilisation to improve the tax-Gross Domestic Product ratio in the case of the Union and
tax-Gross State Domestic Product ratio in the case of the States;
(vi) the impact of the proposed
implementation of Goods and Services Tax with effect from 1st April, 2010,
including its impact on the country’s foreign trade;
(vii) the need to improve the quality of
public expenditure to obtain better outputs and outcomes;
(viii) the need to manage ecology, environment
and climate change consistent with sustainable development;
(ix) the expenditure on the non-salary
component of maintenance and upkeep of capital assets and the non-wage related maintenance
expenditure on plan schemes to be completed by 31st March, 2010 and the norms on the
basis of which specific amounts are recommended for the maintenance of the capital assets
and the manner of monitoring such expenditure;
(x) the need for ensuring the
commercial viability of irrigation projects, power projects, departmental undertakings and
public sector enterprises through various means, including levy of user charges and
adoption of measures to promote efficiency.
4. In making its recommendations on
various matters, the Commission shall take the base of population figures as of 1971, in
all such cases where population is a factor for determination of devolution of taxes and
duties and grants-in-aid.
5. The Commission
may review the present arrangements as regards financing of Disaster Management with
reference to the National Calamity Contingency Fund and the Calamity Relief Fund and the
funds envisaged in the Disaster Management Act, 2005(53 of 2005), and make
appropriate recommendations thereon.
6. The Commission
shall indicate the basis on which it has arrived at its findings and make available the
estimates of receipts and expenditure of the Union and each of the States.
7.
The Commission shall make its report
available by the 31st day of October, 2009, covering the period of five years
commencing on the 1st day of April, 2010.
ADDITIONAL TERM OF REFERENCE
“8. A. Having regard to the need to bring the liabilities of the Central Government on account of oil, food and fertilizer bonds into the fiscal accounting, and the impact of various other obligations of the Central Government on the deficit targets, the Commission may review the roadmap for fiscal adjustments and suggest a suitably revised roadmap with a view to maintaining the gains of fiscal consolidation through 2010 to 2015.”
[Inserted vide Presidential Order dated 25th August, 2008]