The office of
the Twelfth Finance Commission, located at Tolstoy Marg in Jawahar
Vyapar Bhawan, was inaugurated here today by Dr. C. Rangarajan,
Governor of Andhra Pradesh and Chairman-designate of the Commission.
The
Twelfth Finance Commission has been constituted under Article
280 of the Constitution of India with Dr. C. Rangarajan, as the
Chairman, Shri Som Pal, Member, Planning Commission as a part-time
Member and Shri T.R. Prasad, IAS, former Cabinet Secretary and
Professor D.K. Srivastava of the National Institute of Public
Finance and Policy as full-time Members. Dr. G.C. Srivastava is
the Secretary of the Commission. The recommendations of the Twelfth
Finance Commission will be valid for the five year period starting
from the 1st April , 2005 and will relate to distribution between
the Union and the States of the net proceeds of Union taxes, principles
which should govern the grants-in-aid of revenues and measures
needed to augment the Consolidated Fund of the States to supplement
the resources of the Panchayats and Municipalities.
The
Twelfth Finance Commission will also review the state of the finances
of the Union and the States and suggest ways and means by which
the Governments may bring about a restructuring of public finances,
restoring budgetary balance, reducing fiscal deficit, generating
surplus for capital investment, achieving macro-economic stability
and achieving debt reduction along with equitable growth. The
other issues proposed for study by the Twelfth Finance Commission
include the Fiscal Reforms Facility, the debt position of States,
the Calamity Relief Fund and the National Calamity Contingency
Fund.
While
making its recommendations, the Twelfth Finance Commission will
keep in mind certain efficiency factors such as adjustment of
user charges, relinquishing non-priority enterprises through privatization
or disinvestment and resource mobilisation in order to improve
tax-GDP/GSDP ratio.
