The role of planning commission and finance commission presentation.pptx

The Finance Commission and Planning Commission are two crucial institutions in India's governance structure. The Finance Commission, a constitutional body, defines financial relations between the Centre and states, recommending tax distribution, grants-in-aid, and fiscal discipline measures. It promotes fiscal federalism and cooperative governance. In contrast, the Planning Commission, a non-statutory body, was entrusted with creating and executing India's Five-Year Plans, allocating resources, and determining priorities for national development. However, it was replaced by NITI Aayog in 2015 to promote cooperative federalism and sustainable development. While the Finance Commission focuses on Centre-state financial relations, NITI Aayog works towards fostering cooperative federalism, promoting sustainable development, and providing strategic policy support. Both institutions play vital roles in shaping India's economic and developmental landscape, ensuring effective resource allocation, and promoting balanced growth. Their functions complement each other, contributing to India's overall development and progress.

1. Role of planning commission and finance commission By A.kaviya B.B.A.Ll.B (Hons)

2. What is plan? A plan is a deliberable attempt to spell Out how the resources of a country should be put the use . It Has some general and specific goals . In india plans are of five year Duration and are called Five year plan .

3. Planning commission

4. National Institution for Transforming India in the Government of India, which formulated India’s Five-Year Plans, among other functions. In his first Independence Day speech in 2014, Prime Minister Narendra Modi announced his intention to dissolve the Planning Commission. It has since been replaced by a new institution named NITI Aayog. NITI Aayog-National Institution for Transforming India. Formed -15 March 1950
Dissolved -17 Aug 2014
Superseding agency -NITI Aayog
Headquarters - New Delhi

5. Organisation The Commission worked through its various divisions, of which there were two kinds: General Planning Divisions
Programme Administration Divisions . ex – officio chairman – The prime minister

6. Functions of planning commission Making assessment of all resources of the country. Formulation of plan
Determine priorities Determine the nature of the Machinery Recommendations Evaluating

7. Finance commission The Finance Commission is a Constitutionally mandated body that is at the centre of fiscal federalism. Set up under Article 280 of the Constitution, its core responsibility is to evaluate the state of finances of the Union and State Governments, recommend the sharing of taxes between them, lay down the principles determining the distribution of these taxes among States. Its working is characterised by extensive and intensive consultations with all levels of governments, thus strengthening the principle of cooperative federalism. Its recommendations are also geared towards improving the quality of public spending and promoting fiscal stability. The first Finance Commission was set up in 1951 and there have been fifteen so far. Each of them has faced its own unique set of challenges.

8. Qualification The Chairman of a finance commission is selected from people with experience of public affairs. The other four members are selected from people who:
Are, or have been, or are qualified, as judges of a high court,
Have knowledge of government finances or accounts, or
Have had experience in administration and financial expertise; or
Have special knowledge of economics

9. Functions of finance commission Distribution of ‘net proceeds’ of taxes between Center and the States, to be divided as per their respective contributions to the taxes.
Determine factors governing Grants-in-Aid to the states and the magnitude of the same.
To make recommendations to the president as to the measures needed to augment the Fund of a State to supplement the resources of the panchayats and municipalities in the state on the basis of the recommendations made by the finance commission of the state.
Any other matter related to it by the president in the interest of sound finance.
A finance commission is an autonomous body which is governed by the government of India.

10. Difference between planning commission and finance commission Both the institutions, i.e. Finance Commission and Planning Commission,play equally vital roles in terms of devolving funds and working towards reducing regional imbalances in the country. While the Finance Commission is constituted periodically and works for a couple of years (before it submits its Report),Planning Commission ensures that continuous appraisal and adjustments that are essential in the dynamic process of planning for a country as diverse as India is taken care of.(The author works with Centre for Budget and Governance Accountability (CBGA), a New Delhi based policy research and advocacy organisation

11. Conclusion Two institutions that play a key role in influencing the scope of budgetary spending by the Union Government and State Governments are Planning Commission and Finance Commission.The Indian Constitution provides for the necessary institutional framework, financial and functional division of responsibilities between the Centre and the states,and a defined mechanism for intergovernmental transfer to address the existing vertical and horizontal imbalances.
Vertical imbalances refer to the mismatch between the revenue-raising capacity and expenditure needs of theCentre and the States. Horizontal fiscal imbalances exist on account of the inability of some States to provide comparable services due to inadequate capacity to raise funds.

12. Thank you