 "Union Finance Secretary T V Somanathan")
Amid speculation over the composition of the sixteenth Finance Commission, Union Finance Secretary T V Somanathan on Thursday said no legal provisions disallow members from being re-appointed.
“To my knowledge, there is no legal bar on someone who was a member of an earlier commission from being one in a subsequent commission,” Somanathan said.
N K Singh, the 15th Finance Commission chairman, met Union Finance Minister Nirmala Sitharaman on Wednesday after the government announced the terms of reference for the 16th Commission, raising speculation that he may be repeated as the chairman.
In departure from convention, the composition of the 16th FC, which has a mandate over critical issues like distribution of revenues between Centre and states, was not released with the terms of reference (ToR), which was announced on Wednesday by the Union cabinet.
The 16th FC has to submit its report by October 31, 2025, covering a period of five years that will come into effect on April 1, 2026. The recommendations of the 15th Commission are valid till March 31, 2025.
Union Minister Anurag Thakur had said the composition would be announced “as soon as possible”.
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The terms of reference released by the Cabinet on Wednesday contained the constitutionally mandated provisions, such as distribution of net proceeds of taxes between the Centre and the states and among states, principles that should govern the grants-in-aid of the revenues of the states out of the Consolidated Fund of India, and measures needed to supplement the resources of panchayats and municipalities in the states.
‘Less is more, no further ToRs’
Amid concerns that the ToRs are limited in nature about the mandate of the Commission, Somanathan said there would be no further terms of reference beyond what was announced by the Cabinet.
“These are shorter than those of recent commissions… This actually gives the Commission much more leeway and freedom to take into account the different inputs that they get from different stakeholders that appear before the commission,” he said.
On Wednesday, Economic Affairs Secretary Ajay Seth had said more details regarding the commission would be out in the gazette notification.
Usually, the FC’s opinion is sought on matters beyond the constitutionally mandated ones. The last Commission, for instance, was asked to analyse the impact of goods and services tax (GST) on states, performance-based incentives, and expenditure on populist measures, among others.
“This (ToR) is short, but it’s all-encompassing” Somanathan said on the question of whether the absence of specific issues in the ToRs would limit the ability of the commission to decide on specific issues raised by states.
Meanwhile, Somanathan said that under the Centre’s amnesty scheme for dispute settlement in government contracts, Vivaad Se Vishwas, 43,904 cases had been settled and more than Rs 700 crore refunded.
