Two recent amendments to the Terms of Reference (ToR) of the 15th Finance Commission (FFC) are examined here. The first requires the FFC to examine “whether a separate mechanism for funding of defence and internal security ought to be set up and if so, how such a mechanism should be operationalised”. The second arises from Section 83 of the Jammu and Kashmir Reorganisation Act 2019 (J&K Act), which came into effect when Jammu and Kashmir became a Union Territory on October 31. It requires the President to “make a reference to the 15th Finance Commission to include the Union Territory of Jammu and Kashmir in its Terms of Reference and make award for the successor Union territory of Jammu and Kashmir.” Both these amendments are perfunctorily worded, raising constitutional and interpretational issues which the FFC may find challenging . They also work to the detriment of the states. The use of the words “separate mechanism” points to creating a mechanism distinct from the existing one. The Constitution requires that estimates relating to voted expenditure in the Annual Financial Statement be submitted in the form of demands for grants to the Lok Sabha every year. The Government of India (GoI) submits… Read full this story
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