Twelfth Finance Commission

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The Twelfth Finance Commission was incorporated in the year 2005. The commission made recommendations for the distribution of the net proceeds of the taxes between the Union and the states. It also recommended taking of certain measures for augmenting the Consolidated Fund of a state. It also reviewed the financial status of the states and ensured macro-economic stability in the same, evaluated the debt positions of the states and the schemes implemented by the Central Government to ensure an improved financial system.

Facts about Twelfth Finance Commission of India-

The activities of the Twelfth Finance Commission of India are like-
  • To make recommendations for the distribution of net proceeds of the taxes between the Union and the states
  • To make recommendations for the norms related to grants-in-aid of the states to raise their revenues
  • To make recommendations to augment the Consolidated Fund of India allocated to various states
  • To review the financial condition of the Indian states and suggest restructuring of the public finances to ensure an improved financial system along with macro-economic stability
  • To evaluate the resources allotted by the Central Government to the states in India based on the taxation levels
  • To maintain the capital assets and the expenditure on non-plan schemes
  • To provide facilities with respect to irrigation projects, power projects, departmental undertakings, public sector enterprises and so on
  • To review the Fiscal Reform Facility formulated by the Central Government to facilitate an improved financial system in the states
  • To evaluate the arrangements made with regard to the financing of calamities by National Calamity Contingency Fund and the Calamity Relief Fund
  • To present a detail of the State-wise estimates of receipts and expenditure
Important members in Twelfth Finance Commission-

Chairman - Dr. C. Rangarajan

Other members-
Shri T.R Prasad, IAS (Retd.)
Prof. D.K Srivastava
Dr.Shankar Acharya, Part time Member
Shri. Som Pal, Part time Member
Member Secretary - Dr. G.C Srivastava, IAS

Highlights of the Twelfth Finance Commission of India-
  • Cost of Provision of Sewerage Water Treatment
  • Enhancing Fiscal Efficiency
  • Measures needed to augment the Consolidated Fund of the States
  • Prioritize the subjects for releases of funds to Panchyati Raj Institutions
  • Inter State Comparison of HDI
  • Taxes on Commodities and Services in India
  • State Public sector undertaking (SPSUs) and State Road Transport Undertakings (SRTUs)
  • Municipal Solid Waste Management
  • A Summary of Recommendations
  • Functioning of Finance Commissions which also includes the State Finance Commissions
  • Study on State Infrastructure
  • Phasing out the Subsidy Elements: Petroleum Products, Food and Fertilizers