Para 4 of the Presidential Order dated 1st June, 1956 stated
as follows:-
4. The Commission shall, in addition to making recommendations
as to the matters specified in sub-clauses (a) to (c) of clause
(3) of article 280, make recommendations as to the following
matters, namely:-
(a) the sums which may be prescribed under article 273
as grants-in-aid of the revenues of the States of Assam,
Bihar, Orissa and West Bengal in lieu of assignment of any
share of the net proceeds in each year of export duty on
jute and jute products to those States;
(b) the States which are in need of assistance by way of
grants-in-aid of the revenues of those States under article
275, and the sums to be paid to those States, having regard,
among other considerations, to:-
(i) the requirements of the Second Five Year Plan, and
(ii) the efforts made by those States to raise additional
revenue from the sources available to them;
(c) the principles which should govern the distribution
under article 269 of the net proceeds in any financial year
of estate duty in respect of property other than agricultural
land, levied by the Government of India in the States within
which such duty is leviable; and
(d) the modifications, if any, in the rates of interest
and the terms of repayment of the loans made to the various
States by the Government of India between the 15th day of
August, 1947 and the 31st day of March, 1956". The following
two matters were added to the terms of reference on 22.05.1957:-
(e) "the principles which should govern the distribution
among the States of the net proceeds of the additional duty
of excise on mill made textiles, sugar and tobacco (including
manufactured tobacco) and the amounts which should be assured
to the States as the income now derived by them from the
levy on these commodities and the States Sales Tax which
is to be replaced by the additional duty of excise. (f)
the principles which should govern the distribution, under
article 269 of the Constitution of the net proceeds in any
financial year of the tax on railway fares proposed to be
levied by the Railway Passenger Fares Bill, 1957, introduced
in the Lok Sabha on 15th May, 1957".
TERMS OF REFERENCE
OF THE SECOND FINANCE COMMISSION