ARUL IAS ACADEMY ECONOMY –ORGANISATION GROUP1

FINANCE COMMISSION
➢ The Finance Commission came into existence in 1951. It was established under Article
280 of the Indian Constitution by the President of India.
➢ It was formed to define the financial relations between the centre and the state.
➢ The Finance Commission Act of 1951 states the terms of qualification, appointment and
disqualification, the term, eligibility and powers of the Finance Commission.
➢ As per the Constitution, the commission is appointed every five years and consists of a
chairman and four other members.
➢ Formed 22 nov 1951
➢ Headquarters: New delhi

➢ PANEL OF 14TH FINANCE COMMISSION

➢ CHAIRMAN: YV REDDY
➢ Dr M.Govindha Rao, Member
➢ Sushma Nath, Member
➢ Prof Abhijit Sen, Member
➢ Dr Sudipto Mundle, Member
➢ Ajay Narayan Jha, Secretary
FC ESTABLISHED CHAIRMAN OPERATIONAL REPORT
YEAR SUBMISSION
1 1951 K. C. Neogy 1952-57 1952
2 1956 K. Santhanam 1957-62 1956
3 1960 A. K. Chanda 1962-66 1961
4 1964 P. V.Rajamannar 1966-69 1965
5 1968 Mahaveer Tyagi 1969-74 1968
6 1972 K. Brahmananda Reddy 1974-79 1973
7 1977 J. M. Shelat 1979-84 1978
8 1983 Y. B. Chavan 1984-89 1983
9 1987 N. K. P. Salve 1989-95 1989
10 1992 K. C. Pant 1995-2000 1994
11 1998 A. M. Khusro 2000-05 2000
12 2003 C. Rangarajan 2005-10 2004
13 2007 Dr. Vijay L. Kelkar 2010-15 2009
14 2012 Dr. Y. V Reddy 2015-2020 2015

Major Recommendations of 14th Finance Commission headed by Prof. Y V Reddy

✓ The share of states in the net proceeds of the shareable Central taxes should be 42%. This
is 10 percentage points higher than the recommendation of 13th Finance Commission.
✓ Revenue deficit to be progressively reduced and eliminated.
✓ Fiscal deficit to be reduced to 3% of the GDP by 2017–18.
✓ A target of 62% of GDP for the combined debt of centre and states.

Constitutional provisions

✓ Dr. Ambedkar has made several provisions to bridge the gap of finances between the Centre
and the States. These include various articles in the constitution like Article 268, which
facilitates levy of duties by the Centre but equips the states to collect and retain the same.
✓ Similarly, there are Articles 269, 270, 275, 282 and 293 all of which specify ways and
means of sharing resources between Union and States.
ARUL IAS ACADEMY ECONOMY –ORGANISATION GROUP1

PLANNING COMMISSION
➢ The Planning Commission was an institution in the Government of India, which
formulated India's Five-Year Plans, among other functions.

Formed 15 March 1950

Dissolved 17 Aug 2014

Headquarters Yojana Bhavan, New Delhi

The composition of the Commission

❖ Prime Minister -ex officio Chairman

❖ Deputy Chairman- with the rank of a full Cabinet Minister.
❖ Cabinet Ministers with certain important portfolios acted as ex officio members of the
Commission, while the full-time members were experts in various fields like economics,
industry, science and general administration.
❖ Ex officio members of the Commission included the Finance Minister, Agriculture Minister,
Home Minister, Health Minister, Chemicals and Fertilisers Minister, Information
Technology Minister, Law Minister, Human Resource Development Minister and Minister of
State for Planning.

FACTS ON PLANNING

❖ Economic planning, was first initiated in India in 1938 by Congress President and Indian
National Army supreme leader Netaji Subhash Chandra Bose, who had been persuaded
by Meghnad Saha to set up a National Planning Committee.
❖ M. Visvesvaraya had been elected head of the Planning Committee. Meghnad
Saha approached the great engineer and requested him to step down. He argued that
planning needed a reciprocity between science and politics.
❖ M. Visvesvaraya generously agreed and Jawaharlal Nehru was made head of the National
Planning Committee.The so-called "British Raj" also formally established a planning board
that functioned from 1944 to 1946.
❖ After India achieved Independence, a formal model of planning was adopted, and
accordingly the Planning Commission, reporting directly to the Prime Minister of India, was
established on 15 March 1950, with Prime Minister Jawaharlal Nehru as the Chairman.
❖ Authority for creation of the Planning Commission was not derived from the Constitution of
India or statute; it is an arm of the Central Government of India.
ARUL IAS ACADEMY ECONOMY –ORGANISATION GROUP1

NITI aayog
➢ NITI Aayog or the National Institution for Transforming India is a Government of
India policy think-tank established by the Narendra Modi government to replace
the Planning Commission which followed the top-down model.
➢ The stated aim for NITI Aayog's creation is to foster involvement and participation in the
economic policy-making process by the State Governments of India.
➢ The emphasis is on bottom-up approach and make the country to move
towards cooperative federalism .
➢ The Union Government of India announced the formation of NITI Aayog on 1 January
2015, and the first meeting was held on 8 February 2015.

CURRENT COMPOSITION

The NITI Aayog comprises the following:

1. Prime Minister of India as the Chairperson

2. A Governing Council composed of Chief Ministers of all the States and Union territories with
Legislatures and lieutenant governors of other Union Territories.

3. Regional Councils composed of Chief Ministers of States and Lt. Governors of Union
Territories in the region to address specific issues and contingencies impacting more than
one state or a region.

4. Full-time organizational framework composed of a Vice-Chairperson, three full-time

members, two part-time members (from leading universities, research organizations and
other relevant institutions in an ex-officio capacity), four ex-officio members of the Union
Council of Ministers, a Chief Executive Officer (with the rank of Secretary to the Government
of India) who looks after administration, and a secretariat.

5. Experts and specialists in various fields

With Prime Minister Narendra Modi as the Chairperson, the committee consists of

1. Vice Chairperson: Arvind Panagariya

2. Ex-Officio Members: Rajnath Singh, Arun Jaitley, Suresh Prabhu and Radha Mohan Singh

3. Special Invitees: Nitin Gadkari, Smriti Zubin Irani and Thawar Chand Gehlot

4. Full-time Members: Bibek Debroy (Economist), V. K. Saraswat (former DRDO Chief) and
Ramesh Chand (Agriculture Expert)

5. Chief Executive Officer:Amitabh Kant

6. Governing Council: All Chief Ministers and Lieutenant Governors of States and Union
Territories
ARUL IAS ACADEMY ECONOMY –ORGANISATION GROUP1

NATIONAL DEVELOPMENT COUNCIL

➢ The National Development Council (NDC) or the Rashtriya Vikas Parishad is the apex
body for decision making and deliberations on development matters in India, presided
over by the Prime Minister.
➢ It was set up on 6 August 1952 to strengthen and mobilize the effort and resources of
the nation in support of the Plan, to promote common economic policies in all vital
spheres, and to ensure the balanced and rapid development of all parts of the country.
➢ It is an extra-constitutional and non-statutory body. NDC is the listed as an advisory
body to Planning Commission but its advice is not binding

COMPOSITION

• The Council comprises the Prime Minister, the Union Cabinet Ministers, Chief Ministers of
all States or their substitutes, representatives of the Union Territories and the members of
the NITI Aayog.

FACTS

✓ The first meeting chaired by Prime Minister, Jawaharlal Nehru on 8–9 November 1952.
✓ So far 57 meetings had been held.
✓ The 57th Meeting of National Development Council was held on 27 December
2012 at Vidhan Bhavan, New Delhi.

The functions of the Council are

1. to prescribe guidelines for the formulation of the National Plan, including the assessment
of resources for the Plan;
2. to consider the National Plan as formulated by the Planning Commission;
3. to make an assessment of the resources that are required for implementing the Plan and
to suggest measures for augmenting them.
4. to consider important questions of social and economic policy affecting national
development; and
5. to review the working of the Plan from time to time and to recommend such measures as
are necessary for achieving the aims and targets set out in the National Plan.
6. To recommend measures for achievement of the aims and targets set out in the national
Plan.