Tax revenue to States to be kept at 41% for 5 years
February 01, 2021
Greater focus on grants-in-aid; ₹2.38-lakh crore for Defence modernisation
To maintain the predictability and stability of resources, especially during the current pandemic times, the Fifteenth Finance Commission (FFC), headed by NK Singh has recommended that the vertical devolution be retained at 41 per cent for the next five years (2021-26) the same level as in its report for 2020-21.
It has placed greater emphasis on augmenting resources of States through grants-in-aid, particularly Revenue Deficit grants (recommended ₹2.95 lakh crore to 17 states over 2021-26).
This latest recommendation on vertical devolution which forms part of the report (submitted to President in November last year) tabled in Parliament on Monday is at the same level of 42 per cent of the divisible pool as recommended by the fourteenth finance commission. However, the latest report has made the required adjustment of about 1 p