Ninth Finance Commission

The Ninth Finance Commission was incorporated in the year 1990. The Ninth Finance Commission of India makes recommendations under Chapter I of Part XII of the Constitution of India for the distribution of net proceeds of taxes between the Union and the states. While making recommendations, the ninth finance commission focuses largely upon the expenditures of the states along with their requirements to carry out various developmental plans, incentives needed for an improved mobilization of resources, need for a more efficient and speedy execution of plans by the government, and generating revenues for capital investment.

Besides, the commission also suggests changes if necessary on the rules governing net proceeds of estate duties and additional excise duties on commodities, evaluate the replacement of sales tax with the additional excise duties, assess the financial condition of the states in terms of debt returns, and responsible for financing the relief fund expenditure in various states.

Responsibilities of the Ninth Finance Commission of India

  • The ninth finance commission makes recommendations for the distribution of net proceeds of taxes between the Union and the states as per Chapter I of Part XII of the Constitution of India and also allots the shares between the states

  • It also makes recommendations for the norms that govern the grants-in-aid system to raise the economy of the states as per Article 275 of the Indian constitution

  • The commission can suggest any kinds of alteration if necessary with respect to the net income of additional excise duties levied on commodities under the Additional Duties of Excise (Goods of special Importance) Act, 1957 and also the repealed tax imposed on the passengers as per Railway Passenger Fares Tax Act, 1957

  • It will deem the population statistics for the distribution of taxes in the states

  • It also evaluates the usefulness of the replacement of sales tax with the additional excise duties

  • The commission evaluates the financial condition of the states in terms of their debt positions

  • It also reviews the policies with respect to the financing of relief expenditure ensured by the government of India to the states

Important Members Involved in the Ninth Finance Commission of India

Chairman - Shri N.K.P. Salve

Other important members-

Shri Justice Abdus Sattar Qureshi
Dr. Raja J. Chelliah
Shri Lal Thanhawla (Resigned on 24th January, 1989)
Shri Mahesh Prasad, Member Secretary (Resigned)
Shri S. Venkitaramanan (In place of Shri Lal Thanhawla on 3rd May, 1989)
Shri R. Keishing (part time Member of the Commission w.e.f. 25th November 1989)
Shri K.V.R. Nair was appointed as Member Secretary (In place of Shri Mahesh Prasad from 13th July, 1989)

Highlights of the Ninth Finance Commission

  • Additions Excise Duties on various commodities
  • Upgrading the Standards of Administration
  • Grants-in-aid in various states to raise the revenues of the same
  • Estate Duty in Respect of Property excluding Agricultural Land
  • Grant in Lieu of Sales Tax on Railway Passenger Fares
  • Division of Union Duties of Excise
  • Financing of Relief Expenditure for various states
  • Income-Tax
  • Evaluation of the resources provided by the Central Government for enlistment of the states
  • Assessment of the usage of resources by the states
  • Summary of Recommendations