Fifth Finance Commission

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The Fifth Finance Commission was incorporated in the year 1969. It mainly aims at making recommendations for the distribution of various taxes between the Union and the states as per the Chapter-I of part XII of the Indian Constitution. The fifth finance commission also distributes the shares between the states in India depending on their net proceeds.

Fifth Finance Commission - At A Glance

The Fifth Finance Commission in India regulates the rules that govern the grants-in aid of the income of states under Article 275. Such grants-in-aid come from the Consolidated Fund of India and it is allotted to the states, which are in sincere need of financial assistance.

Role played by the Fifth Finance Commission in India
  • The fifth finance commission makes recommendations for the distribution of net proceeds of various taxes between the Union and states. It regulates the grants-in-aid issue of the income of the states who are in need of financial assistance as per the Clause (1) of Article 275. The resources are allotted to the states in India as an aid to raise their revenues.

  • The fifth finance commission is also responsible for bringing about certain changes on the additional estate duty in terms of property that does not include the agricultural lands

  • The fifth finance commission of India also looks after the additional duties levied upon cotton fabrics, sugar, tobacco, woolen fabrics, silk fabrics, and rayon or artificial silk fabrics

Important members involved in Fifth Finance Commission of India

Shri Mahavir Tyagi is the Chairman of the Fifth Finance Commission in India. There are other important members of the Commission like
  • Shri P.C. Bhattacharyya (Late)
  • Shri M. Seshachalapathy (Retired Judge)
  • Dr. D. T. Lakdawala
  • Shri V.L. Gidwani, Member Secretary
  • Shri G. Swaminathan (21st February, 1969, joined in place of Shri P.C. Bhattacharyya)
Highlights of the Fifth Finance Commission of India
  • Grants-in-aid for various states in India under Article 275 of the Constitution
  • Scope for Additional Revenue to raise the income of states
  • Distribution of Union Excise Duties
  • Income Tax Issues
  • Different problems faced by the states in financial terms
  • Division of Taxes and Duties under Article 269 of the Constitution
  • A report on the recommendations made by the Fifth Finance Commission