Eighth Finance Commission

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The Eighth Finance Commission was incorporated in the year 1984. The commission makes recommendations for the distribution of taxes between the Union and states with reference to Chapter I of Part XII of the Constitution of India. It also makes recommendations for the grants-in-aid to raise the revenues of states in India under clause (1) of Article 275, it is liable to suggest changes if required in the regulations for distributing net proceeds of estate duty on property and excise duties on commodities in place of the sales tax, it will also take note of the population statistics in various states while initiating the recommendations, and the commission is also responsible for analyzing the opportunities in order to uplift the income of states in India.

Main areas of focus of Eighth Finance Commission in India
  • The eighth finance commission makes recommendations for the distribution of net proceeds of taxes within the Union and the states in India and also allots the shares within the states with reference to Chapter I of Part XII of the Constitution of India

  • The commission is also responsible for making recommendations for grants-in-aid in various states in India in order to uplift the revenues of those states. These financial assistance comes from Consolidated Fund of India and the procedure is detailed in clause (1) of Article 275 of the Constitution of India

  • The commission is liable to suggest changes with respect to the net proceeds of estate duty in terms of property and additional excise duties on cotton fabrics, woolen fabrics, sugar, tobacco, and rayon or artificial silk fabrics

  • It is also duly responsible for modifying the repealed taxes imposed on the railway passengers

  • The commission reviews the policies for financing the relief expenditure

  • It can also evaluate non-plan capital gap

Eighth Finance Commission at a glance

All the recommendations made by the eighth finance commission are subjected to the following points
  • The resources provided by the Central Government to the states in India in order to assist them to raise their revenues to meet the basic requirements of civil administration, defense and border security, servicing of debt, and other expenditure or liabilities

  • The usage of the financial assistance in terms of executing the state plans

  • The basic needs of the states to meet the administration and other commitments or liabilities which does not belong to the plan schemes of states

  • Maintaining the capital assets and plan schemes in order to monitor the manner of expenditure that will be carried out by various states under Indian constitution

  • The basic requirements of the states in order to upgrade their non-developmental sectors

  • Ensuring opportunities for a more systematic financial condition

Important members involved in Eighth Finance Commission of India

Chairman - Shri Y.B. Chavan

Other important members-

Shri Justice Sabya Sachi Mukherjee (Resigned)
Dr. C.H. Hanumantha Rao
Shri G.C. Baveja
Shri A.R. Shirali
Shri Justice T.P.S. Chawla (In place of Shri Justice Sabha Sachi Mukherjee)
Shri N.V. Krishnan, Secretary

Highlights of the Eighth Finance Commission
  • Grant in Lieu of Tax on Railway Passenger Fares
  • Division of Union Duties of Excise
  • Income-Tax Issues
  • Financing of Relief Expenditure for various states
  • Taxes and Duties mentioned in Articles 268 and 269 of the Constitution of India
  • Estate Duty in Respect of Property excluding Agricultural Land
  • Non-Plan Capital Gap of the States
  • Additions Excise Duties on various commodities
  • Reassessment of the Forecasts of State Governments on Revenue Account
  • Grants-in-aid in various states to uplift the income
  • Reassessment of the Forecasts of the Central Government
  • Up gradation of Standards of Administration
  • A report on the Recommendations Made
  • Grant on Account of Wealth Tax on Agricultural Property