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Cabinet approves formation of 15th Finance Commission, pay hike for judges

The Commission is required to make recommendations on distribution of the net proceeds of taxes between the Centre and the states. The recommendations by the newly formed 15th Finance Commission are supposed to be in place before April 1, 2020.

BT Online   New Delhi     Last Updated: November 22, 2017  | 21:36 IST
Cabinet approves formation of 15th Finance Commission, pay hike for judges
Finance Minister Arun Jaitley at a press briefing after the Cabinet meeting on Wednesday. Image: PTI

The Union Cabinet gave its approval for setting up the 15th Finance Commission which is meant to assess the tax resources of the country and suggest a formula for distributing them among states. The members of the new Commission and its terms of reference will be notified in the due course of time, Finance Minister Arun Jaitley said during the press briefing after the Cabinet meet.

As per Article 280(1) of the Constitution, the government is obligated to form the Finance Commission after every five years, or at an earlier time as the President deems necessary. The Commission is required to make recommendations on distribution of the net proceeds of taxes between the Centre and the states. The recommendations by the newly formed 15th Finance Commission are supposed to be in place before April 1, 2020. "Normally, it takes 2 years for Finance Commission to give its recommendations," Jaitley said.

On who will be appointed as the Chairman of the 15th Finance Commission, Jaitley stated that names of the members of 15th Finance Commission will declared shortly in near future.

The Finance Commission also suggests the principles which should govern the grants in aid of the revenues of the states out of the Consolidated Fund of India. The 15th Finance Commission will also have to factor in the impact of the Goods and Services Tax (GST), which was rolled out earlier this year on July 1, on the resources of the central as well state governments when it furnishes its recommendations for allocating tax resources.

On the question of whether the 15th Finance Commission will also allocate more resources to the states, Jaitley said, "I think let us not pre-judge the situation. India is a Union of states, the Union also has to survive."

The 14th Finance Commission was set up on January 2, 2013. Its recommendations cover the period from April 1, 2015 to March 31, 2020.

Meanwhile, the Union Cabinet has given its nod to the revision in the salaries, gratuity, allowances structure, and pension of the judges, who are working in and who have retired from the Supreme Court of India and the High Courts across nation. The decision is to implement recommendations by the 7th Central Pay Commission in respect of civil servants.

The Cabinet approval, given in the meeting chaired by Prime Minister Narendra Modi today, will pave the way for necessary amendments in the two laws, namely Supreme Court Judges (Salaries and Conditions of Service) Act, 1958 and High Court Judges (Salaries and Conditions of Service) Act, 1954. These two legislations deal with the salaries of Chief Justice of India (CJI) along with Judges of Supreme Court of India, and Chief Justices and all Judges of High Courtsa, respectively.

The increase in the salary and allowance structure following this decision is set to benefit 31 judges of Supreme Court of India, including the CJI, along with 1079 judges of High Courts including the Chief Justices there. Apart from this, over 2500 retired Judges will also be benefited from this decision from this decision after their pension and gratuity is hiked in accordance to recommmendatoions by the 7th Pay Commission.

(With PTI inputs)

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