The Union Cabinet on Wednesday approved the extension of the term of the 15th Finance Commission, headed by N K Singh, up to November 30.
"This will enable the commission to examine various comparable estimates for financial projections in view of reforms and the new realities to finalise its recommendations for the period 2020-2025," an official statement said.
The commission was constituted on November 27, 2017 in pursuance of clause (1) of Article 280 of the Constitution and Finance Commission (Miscellaneous Provisions) Act, 1951. It was to submit its report on the basis of its terms of reference by October 30 covering a period of five years starting commencing from April 1, 2020.
The commission's constitution has been in the backdrop of various major fiscal and budgetary reforms introduced by the government in the past four years.
These include closure of the Planning Commission and its replacement by NITl Aayog, removal of distinction between non-plan and plan expenditure, advancing the budget calendar by one month and passing of the full Budget before start of the new financial year, introduction of Goods and Services Tax (GST) from July 2017 and new fiscal responsibility and budget management (FRBM) architecture with debt and fiscal deficit path.
The terms of reference take into account the fiscal and budgetary reforms besides the task of determining the expenditure and receipts of the Centre and state governments. The process is time-consuming as checking data consistency across time and data sets become challenging.