Fifteen finance commission submits report on tax devolution to Prez Kovind

 The 15th Finance Commission submitted its report for 2021-22 to 2025-26 to the President Ram Nath Kovind on Monday. The main task of the Commission is to recommend devolution of the central taxes among the union government and the states.

The Commission, headed by former bureaucrat N K Singh, had retained the devolution at the same level in its interim report for 2020-21 as was recommended by the previous Commission, even as at the outset it seemed that it had reduced it. The 14th finance commission had recommended that 42 per cent of the central tax collections be given to the states, up by 10 percentage point over the previous finance commission's suggestion.

The 15th finance commission had recommended that 41 per cent of the central taxes be transferred to the states for 2020-21. The one percentage point decrease is to provide for the newly formed union territories of Jammu and Kashmir, and Ladakh from the resources of the Centre.

However, with the Centre increasingly using the cess to mobilise resources, the states share in overall tax collections by the Centre has gone much below the recommendations of the finance commissions in the recent years.

Finance commission reportPresident Ram Nath Kovind being presented the 15th Finance Commission report.

For instance, the Centre was projected to collect Rs 21.6 trillion in 2019-20 (revised estimates) but the states' share was pegged at just Rs 6.6 trillion to the states which constituted just 30.3 per cent of the overall tax mop up. It should have been 42 per cent, if one goes by the 14th finance commission's recommendations, but it was much less as cess did not form part of the divisible tax pool.

Besides devolution, the ongoing Covid-19 crisis is all set to decide the contours of the 15th finance commission's recommendation.

According to sources, the commission may recommend that the Centre and states combined should spend around 2.5 per cent of the country's gross domestic product (GDP) on the health sector. At present, they spend 0.9 per cent, with 0.3 per cent coming from the Centre and 0.6 from the states.

There were fears that funds to the southern states would be curtailed since one of the terms of reference to the 15th finance commission called for giving weightage to population. However, that fear may be allayed since the commission is likely to more or less neutralise it by giving more funds to those which have done better in terms of population control.

The Commission is also understood to have recommended setting up of non-lapsable defence fund for capital expenditure for the forces, including paramilitary and state police. To be called Modernisation of Defence and Internal Security Fund (MDISF), the fund would get resources from the Consolidated Fund of India and sale of defence land and defence public sector enterprises.

Some voters don't realise importance of right to exercise franchise: Prez

President Ram Nath Kovind on Saturday lamented that there are some voters who do not understand the importance of their right to exercise franchise and reminded them that in several countries people had to struggle to get it.

Addressing an event here on National Voters' Day marking the establishment of the Election Commission in 1950, the President said from the very first general election to the 17th Lok Sabha polls held last year, voters have increased the credibility of Indian democracy all over the world.

"For this, I congratulate all the voters of the country. But even today some of our voters do not understand the importance of their franchise. They should know that in most of the democratic countries of the world, the common people had to agitate to get the franchise and many sacrifices had to be made," Kovind said.

He pointed out that even in old democracies such as England, women were able to get equal voting rights in the 20th century, after nearly three decades of struggle.

The framers of the Indian Constitution gave this invaluable right to all adult Indians without any discrimination, the President said.

Kovind reminded the audience that soon after Independence, India granted adult suffrage to all citizens which came under a lot of criticism as at that time, democracy was limited to a few developed and prosperous nations.

There were reservations that with only 16 per cent literacy, and poverty, universal adult franchise would not be successful. He said the decision was dubbed as "biggest gamble in history".

"But our voters proved it to be the biggest successful experiment in democracy in the world history. They lived up to the conviction expressed by the Constitution makers on the common man," the President noted.

Pakistan denies permission to President Kovind to enter its airspace

Pakistan has refused a request by India to allow President Ram Nath Kovind to use its airspace for his flight to Iceland, Foreign Minister Shah Mehmood Qureshi said on Saturday.

Kovind will embark on a visit to Iceland, Switzerland and Slovenia from Monday during which he is expected to brief the top leadership in those countries on India's "national concerns", especially in view of terror incidents this year, including the Pulwama attack.

The decision was approved by Prime Minister Imran Khan in view of the tense situation in Kashmir, the minister told state broadcaster PTV.

Pakistan fully closed its airspace on February 26 after the Indian Air Force (IAF) fighter jets struck a Jaish-e-Mohammed (JeM) terrorist training camp in Balakot following the Pulwama terror attack in Kashmir in which 40 CRPF personnel were killed.

However, in March, it partially opened its airspace but kept its ban for the Indian flights.