Question

compare 12 and 13 financial commission reports​

Answer 1

Answer:

Finances of Union and States

1. The Ministry of Finance (MoF) should

ensure that the finance accounts fully reflect

the collections under cesses and surcharges

as per the relevant heads, so that there are

no inconsistencies between the amounts

released to states in any year and the

respective percentage shares in net central

taxes recommended by the Finance

Commission for that year.

2. The states need to address the problem of

losses in the power sector in a time-bound

manner.

3. Initiatives should be taken to reduce the

number of Centrally Sponsored Schemes

and to restore the predominance of

formula-based plan transfers.

4 . A calibrated exit strategy from the expansionary

fiscal stance of 2008-09 and 2009-10 should

be the main agenda of the Centre.

5 .  Both the Centre and the states should

conclude a ‘Grand Bargain’ to implement the

Model GST. The Grand Bargain comprises

six elements:

6 . Any GST model adopted must be consistent

with all the elements of the Grand Bargain.

To incentivise implementation of the Grand

Bargain, this Commission recommends

sanction of a grant of Rs. 50,000 crore. The

grant would be used to meet the

compensation claims of State Governments

for revenue losses on account of

implementation of GST between 2010-11 and

2014-15, consistent with the Grand Bargain.

Unspent balances in this pool would be

distributed amongst all the states, as per the

devolution formula, on 1 January 2015.