Finance Commission to submit five-year report on November 9 – business news

The 15th Finance Commission, which decides the devolution of financial resources between states and the Centre, is set to submit its final report for the years 2021-2022 to 2025-2026 to President Ram Nath Kovind on November 9, according to an official statement.

The commission will also present a copy of the report to Prime Minister Narendra Modi next month.

The report will contain recommendations for the next five years, beginning 2021-22, and is likely to be tabled in the Parliament along with an action-taken report by the government on February 1, when finance minister Nirmala Sitharaman presents her third Union budget.

The Constitution, through Articles 280 to 281, provides for a unique mechanism in finance commissions for the division of taxes and revenues vertically between the Centre and states, and horizontally among all states, based on their levels of development, prosperity and regional needs.

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The finalisation of the report, that will divide taxes between the Centre and states, comes at a time when states and the Centre are at loggerheads over the Goods and Services Tax compensation.

The 15th Finance Commission’s report could be a landmark for its recommendations regarding public health and is likely to stress upon healthcare, given the Covid19 pandemic. It may also recommend the formation of a non-lapsable defence and internal security fund.

In an interview on July 8, chairman NK Singh had said that for the first time, the report is likely to devote an entire chapter on public health financing when it submits its final report.

“The public sector has an inescapable obligation towards health. The private sector alone cannot fulfil it. Of course, there will be public-private partnerships. Over the next five years, the Centre alone should be able to spend at least 2.1% of GDP on health. Let’s see,” Singh had said.

Singh had, in that interview, also said the new public health financing model for the country would include financial incentives and grants to states for a “couple of sectoral items”. “Let’s say, if a state provides for X as public health infrastructure, then it will qualify for Y incentive.” Health facilities have to be demand-driven, he said.

In another interview on July 21, Singh had talked of a “development matrix” which will bring the levels of social development, especially access to health-care and schooling, of states into the framework of how resources are distributed.

The finalised report was signed by, apart from Singh, members of the commission, Ajay Narayan Jha, Prof Anoop Singh, Ashok Lahiri and Ramesh Chand.

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