Panel seeks tab on spending

New delhi, Dec. 30: The Finance Commission on Wednesday submitted its report to the President, Mrs Pratibha Patil, with the recommendations of a new path for fiscal prudence.

The government will table the report in Parliament before the Union Budget. The finance minister, Mr Pranab Mukherjee, said that the next Budget will reflect the commission’s recommendations.

The 13th Finance Commission chairman, Dr Vijay Kelkar, said that the report dealt with sharing of tax revenue between the Centre and states, distribution of funds among states and support to local bodies.

He said that the commission was asked to suggest a new path for fiscal consolidation and it has recommended fiscal path for the next five years.

The 13th Finance Commission was constituted by the President in November, 2007, to determine the sharing of tax revenues between the Centre and the states as well as to make recommendations on other related issues. The commission’s report was to cover the period 2010-15 and was to be submitted by December 31, 2009.

Dr Kelkar said that the report looked at the implications of environment and climate change, ways to improve outcomes and outputs of public expenditure, and impact of GST on trade.

Dr Kelkar said that, in the report, there is no recommendation on the tax structure and it only dealt with the revenue sharing between the Centre and the states. “We have recommended a share, which will be the share between the Centre and the states of the centrally collected taxes,” said Dr Kelkar.

The Finance Commission report assumes significance in view of the ongoing reforms in indirect and direct taxes, which will have a bearing on the tax collections.