SME Times News Bureau | 16 May, 2019
The Finance Commission held consultations with
senior officials of the Ministry of Finance on Thursday on the overall economic
situation and key economic variables.
These discussions are credible to the ongoing work
of the Commission to reach an appropriate conclusion on both the vertical and
the horizontal devolution.
The Commission observed that the GDP numbers have
somewhat fluctuated within the overall global trend which suggests continued high
growth trend over the medium term.
The Commission also noted that the revenue
projections on the Direct Taxes are healthy though on Indirect Taxes, there
have been periodic fluctuations.
On the expenditure trend, there were discussions in
regard to the rationalisation of the Centrally Sponsored Schemes in sync with
the new life cycle, they being co-terminus with the Finance Commissions.
Detailed discussions have continued over the last
few months with the Finance Ministry on the issues of the consequences of UDAY
and 7th Pay Commission particularly in the context of the finances
of the States.
The Finance Ministry presented before the
Commission some preliminary views of the Government on the Financial Terms of
Reference of the Commission.
The economic development in the last 5 years were
analysed in detail with specific focus on Growth, Investments, Industrial
Production, Banking and Payments, Inflation and Monetary Policy, External
Sector, Medium Term Outlook.
The Ministry made its projections for 2018-19 and
2019-20 to the Commission along with its projections for the award period of
the XVFC, which is 2020-21 to 2024-25.
The Finance Ministry gave some accounts and
overviews of Receipt and Expenditure Forecast including a fiscal overview of
XIVFC vs. XVFC both a percentage of GDP and as percentage of GRR.
They also made a resource forecast which included
tax projections; and a comparative picture of tax growth and buoyancy.
The expenditure projections made by the Ministry
included expenditure classifications and requirements; expenditure of the
Central Government during the award period of the XIVFC and the expenditure
requirements during the award period of the XVFC.
The Ministry and the Commission had a detailed
discussion on fiscal management in which the Ministry put up a number of
suggestions for consideration of the Commission.
Discussions were also held on GST issues, local
body grants and population data.
The Commission is now awaiting the full Memorandum
of the Government of India through Finance Ministry which is expected to be