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Eleventh Finance Commission

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The Eleventh Finance Commission was incorporated in the year 2000. The commission was responsible for making recommendations on distribution of taxes between the Union and the states along with the grants-in-aid to raise the income of the states. The Eleventh Finance Commission of India has other responsibilities as well which include reviewing the financial conditions of the states in terms of various developmental plans, evaluating the resources provided by the government to the states and the usage of the same by the states, it will consult the state finance commission for making recommendations, make suggestions regarding the rules that govern the net proceeds of the additional excise duties on various commodities as well as the financial assistance provided to the states to meet the taxes on railway passenger fares, assess the debt position of the states, and review the financial condition of the Union and the states and restructure it to ensure macro-economic stability.

Responsibilities of the Eleventh Finance Commission
  • Make recommendations for the distribution of taxes between the Union and the states and also for the rules which governs the financial aid granted to the states to raise their revenues

  • Make recommendations in collaboration with the state finance commission for increasing the funds of a state by appending the resources of Panchayats and municipalities in the state

  • Reviewing the financial condition of the states and restructuring the public finance to ensure macro-economic stability
  • The commission will work for local bodies as well in terms of making recommendations in association with the state finance commission

  • It is liable to suggest changes in the norms regulating additional excise duties on commodities as well as the grants availed to the railway passengers for tax fares

  • It also evaluates the financial conditions of the state to have a check on the debt positions

A quick look on the Eleventh Finance Commission

The Eleventh Finance Commission will have to take note of the following points while making recommendations:
  • Resources provided by the Central Government to the states in terms of civil administration, defense and border security, servicing of debts, and other expenditures or liabilities

  • Resources of income for the states with respect to the levels of taxation

  • Basic needs of the states to meet the expenses regarding plan and non-plan schemes

  • Maintaining the capital assets and monitoring the expenses of various plan schemes

  • Need for reasonable tax returns on irrigation projects, power projects, State Transport Undertaking, departmental commercial undertakings, and public sector enterprises

  • Providing an improved financial system

Important members involved in the Eleventh Finance Commission

Chairman - Prof. A.M. Khusro
Other Members are-
Shri N.C. Jain
Shri J.C. Jetly, IAS (Retd.)
Dr. Amaresh Bagchi
Shri T.N. Srivastava, IAS, Member Secretary

Highlights of the Eleventh Finance Commission of India
  • Restructuring of Public Finances
  • Relief Fund to overcome calamities
  • Grants-in-aid to the states
  • Monitoring the local bodies
  • Monitoring the debt positions of the states and improve them
  • Upgrading the grants related to special cases
  • Evaluating the resources provided by Central Government
  • Distribution of taxes between the Union and the states
  • Summary of recommendations