Explanatory
Memorandum on the action taken on the recommendations of
the Second Finance Commission in their report dated 30th
September, 1957
The recommendations of the Commission have
been summarised in Section XVIII of their Report which is
being laid on the table of Parliament. They have been accepted
by Government.
The Commission's recommendations fall
into three categories, those to be implemented by an Order
of the President, those to be implemented by law of Parliament
and those to be implemented by executive orders. The recommendations
under Article 270, 273 and 275(1) of the Constitution fall
in the first category and the necessary orders will be submitted
to the President for approval. The recommendations relating
to the distribution of certain Union duties of excise between
the Union and the States, the distribution among the States
under Article 269(2) of the Constitution of Estate Duty
on property other than agricultural land and the tax on
railway fares and the levy and distribution of additional
duties of excise in replacement of sales taxes on certain
commodities fall in the second category. Legislation will
be promoted, if possible in the current session of Parliament,
to implement them. The question of the levy of additional
duties of excise in replacement of sales taxes is still
under discussion with the State Governments and if those
duties are levied, they will be distributed as recommended
by the Commission. The recommendation regarding loans has
to be implemented by executive orders and necessary action
will be taken in consultation with the State Governments.
The Commission have also made certain
recommendations in paragraphs 164, 182, 191 to 197 and 202
of their Report. These recommendations are also generally
acceptable to Government and will be implemented, as far
as possible, in consultation with the State Governments
and other authorities where necessary.
Sd/-
(H.M. Patel)
Principle Secretary to the Government of India
New Delhi
Dated the 13th November, 1957.
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