The Union cabinet on Wednesday extended the term of the 15th Finance Commission till October 2020. The commission will submit its interim report on November 30 and the final report by October 30, 2020, a government release said. The extension of term will allow the commission to examine various financial projections in view of the current economic scenario before arriving at its recommendations for the period 2020-2026.
The interim report of the Commission will offer formulae for tax devolution for the next financial year. The changes in Jammu & Kashmir necessitated the submission of an interim report. Also, the Commission could not visit several states in time because the model code of conduct was in force ahead of assembly elections.
The proposed increase in the period of coverage of the commission will help medium-term resource planning of the Union and state governments. The state and central governments can now design schemes with medium to long-term financial perspective, allowing mid-course evaluation and corrections. The impact of tax concessions and other reforms announced recently will reflect in the data by the end of April-June quarter of the next fiscal.