Thirteenth Finance Commission submits report

The Thirteenth Finance Commission, headed by Vijay Kelkar, today submitted its report to President Pratibha Patil. The president will forward the report to the finance ministry for further action.

The Finance Commission, which makes five-year recommendations on the sharing of tax revenues between the union and state governments, also makes recommendations on other related issues as required under its terms of reference.

The Thirteenth Finance Commission was constituted by the President on 13 November 2007 under article 280 of the Constitution and the Commission's report would cover the period 2010-15.

The suggestions of the 13th Finance Commission assume extra significance as the government seeks to introduce a comprehensive indirect tax regime - the goods and services tax (GST) - from the next financial year.

"We had been asked to suggest new path for fiscal consolidation … we have recommended a fiscal path (on taxes) for the next five years (2010-15)," chairman Vijay Kelkar told reporters in his New Delhi office.

Details of the report are under wraps so far. Kelkar, a former finance secretary, went no further than to say that it "deals with sharing of tax revenue between the centre and the states, distribution of funds among states and support to local bodies".