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FC Recommendation, Economic Survey and Budjets PDF
FC Recommendation, Economic Survey and Budjets PDF
The Finance Commission of India was formed in 1951. It was established under Article 280
of the Indian Constitution by the President of India. The Commission was formed to define
the financial relations between the centre and the state.
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The Commission shall have all the powers of the Civil Court as per the Code of Civil
Procedure, 1908.
It can call any witness, or can ask for the production of any public record or
document from any court or office.
It can ask any person to give information or document on matters as it may feel to be
useful or relevant. It can function as a civil court in discharging its duties.
Highest weight of 50 per cent is given to distance from the highest per capita income
district, followed by population (1971 census) at 17.5 per cent, demography (2011 census)
at 10 per cent, area at 15 per cent and forest cover at 7.5 per cent
Fiscal deficit should come down to 3.6 per cent of GDP in 2015-16 from projected 4.1 per
cent in 2014-15 and then 3 per cent in following year and kept at that for three more years.
Not different from existing roadmap, though the present time frame ends in 2016-17.
Wants revenue deficit to come down from 2.9 per cent in FY15 to 2.56 per cent in FY16 and
then progressively reduce to 0.93 per cent by 2019-20
Fiscal deficit should be at 2.76 per cent in FY16, to come down to 2.74 per cent by FY20
though it would increase in between. To be revenue surplus in all these years
CENTRE'S DEBT
To come down from 45.4 per cent of GDP in FY15 to 43.6 per cent in FY16 and then
progressively should reduce to 36.3 per cent by FY20
STATES' DEBT
Projected to increase from 21.90 per cent in FY16 progressively to 22.38 per cent in FY20
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States be taken away from operation of NSSF with effect from next financial year
Examine the possibility of setting up of CST for amortisation of debt of the Union govt
Replace the advisory body with a statutory body, through necessary amendments to the
Railways Act, 1989.
ADVERTISEMENT TAX
States should empower local bodies to impose this tax to augment their revenues
The commission has recommended states' share in net proceeds of tax revenues be 42 per
cent, a huge jump from the 32 per cent recommend by the 13th Finance Commission, the
largest change ever in the percentage of devolution. As compared to total devolutions in
2014-15, total devolution of states in 2015-16 will increase by over 45 per cent
The panel has recommended tax devolution be the primary route of transfer of resources
to the states; the government has accepted the recommendations keeping in mind the
spirit of National Institution for Transforming India (NITI)
The commission has recommended distribution of grants to states for local bodies using
2011 population data. Grants will be divided into two broad categories on the basis of rural
and urban population - (i) a grant constituting gram panchayats and (ii) a grant constituting
municipal bodies
The panel has recommended the grants to states for local bodies be in two parts, a basic
grant and a performance grant. The ratio of basic to performance grant is 90:10 with
respect to panchayats and 80:20 in the case of municipalities.
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The total grants recommended by the commission are Rs 2,87,436 crore for a five-year
period from April 1, 2015 to March 31, 2020. Of this, Rs 2,00,292.20 crore will be given to
panchayats and Rs 87,143.80 crore to municipalities. The transfers for financial year 2015-
16 will be Rs 29,988 crore
The Commission has said, with regard to disaster relief, the percentage share of states will
continue to be as before and follow the existing mechanism. This will be to the tune of Rs
55,097 crore. After implementation of GST, the recommendations of the panel on disaster
relief would be implemented
The panel has recommended 'post-devolution revenue deficit grants' for a total of Rs
1,94,821 crore on account of expenditure requirements of the states, tax devolution and
revenue mobilisation capacity of the states. These grants will be given to 11 states.
Eight centrally sponsored schemes will be delinked from support from the Centre. Various
centrally sponsored schemes will now see a change in sharing pattern, with states sharing a
higher fiscal responsibility for implementing the schemes
OTHER RECOMMENDATIONS
The Finance Commission has also made recommendations on cooperative federalism, GST,
fiscal consolidation roadmap, pricing of public utilities and public sector undertakings
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Economic Survey
The Finance Ministry of India presents the Economic Survey in the parliament every year,
just before the Union Budget. It is the ministry's view on the annual economic
development of the country. The survey was prepared by the finance ministry's chief
economic adviser Arvind Subramanian.
The economic survey, the basis for Jaitley's budget for the fiscal year starting April 1,
forecast the economy would grow by 8.1-8.5 percent under a new calculation method that
makes India the world's top-growing big economy.
Fiscal Deficit
India must meet its medium-term fiscal deficit target of 3 percent of GDP
Government will adhere to fiscal deficit target of 4.1 percent of GDP in 2014/15
Growth
Economic growth at market prices seen between 8.1 - 8.5 percent in 2015/16 on new
GDP calculation formula
Total stalled projects seen at about 7 percent of GDP, mostly in private sector
Reforms
India can increase public investments and still hit its borrowing targets
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Inflation
Govt and central bank need to conclude monetary framework pact to consolidate
gains in inflation control
Fiscal Consolidation
Estimated at about 1.3 percent of GDP in 2014/15 and less than 1.0 percent of GDP in
2015/16
Subsidies
Overhauling of subsidy regime would pave the way for expenditure rationalisation
Liquidity
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Railway Budget
The Railway Budget is presented separately from the general budget of India every year
since 1924. At that time, Railway budget was more than 70% of the country’s Budget. So
there was need of separate Budget for Railways. Now Railway Budget is around 15% of
country’s budget. But still we follow the traditional way of budgeting.
Railway Minister Suresh Prabhu presented the Railway Budget for 2015 to 2016 in Lok
Sabha on February 26′ 2015. While presenting the budget, the Minister referenced Prime
Minister Narendra Modi’s pet schemes like Swachch Bharat, Digital India and Make in
India. The Minister announced no new trains and there is no will be no hike in Passenger
fares.
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Budget
Budget is an itemized summary of likely income and expenses for a given period. It include
planned sales volumes and revenues, resource quantities, costs and expenses, assets,
liabilities and cash flows.
India
The first Union budget of independent India was presented by R. K. Shanmukham Chetty on
November 26, 1947.
Taxation
Infrastructure
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Education
AIIMS in Jammu and Kashmir, Punjab, Tamil Nadu, Himachal Pradesh, Bihar and
Assam.
IIT in Karnataka; Indian Institute of Mines in Dhanbad to be upgraded to IIT.
PG institute of Horticulture in Armtisar.
Kerala to have University of Disability Studies
Centre of film production, animation and gaming to come up in Arunachal Pradesh.
IIM for Jammu and Kashmir and Andhra Pradesh.
Welfare schemes
GST and JAM trinity (Jan Dhan Yojana, Aadhar and Mobile) to improve quality of life
and to pass benefits to common man.
Six crore toilets across the country under the Swachh Bharat Abhiyan.
MUDRA bank will refinance micro finance orgs. to encourage first generation SC/ST
entrepreneurs.
Housing for all by 2020.
Upgradation 80,000 secondary schools.
DBT will be further be expanded from 1 crore to 10.3 crore.
For the Atal Pension Yojna, govt. will contribute 50% of the premium limited to Rs.
1000 a year.
New scheme for physical aids and assisted living devices for people aged over 80 .
Govt to use Rs. 9000 crore unclaimed funds in PPF/EPF for Senior Citizens Fund.
Rs. 5,000 crore additional allocation for MGNREGA.
Govt. to create universal social security system for all Indians.
Agriculture
Defence
Rs. 2,46,726 crore allocated for defence (an increase of 9.87 per cent over last year)
Focus on Make in India for quick manufacturing of Defence equipment.
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Renewable energy
Tourism
Develpoment schemes for churches and convents in old Goa; Hampi, Elephanta
caves, Forests of Rajasthan, Leh palace, Varanasi, Jallianwala Bagh, Qutb Shahi tombs
at Hyderabad to be under the new tourism scheme.
Visa on Arrival for 150 countries.
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