J&K is set to have a separate Finance Commission with a five-year term and it shall be constituted by President of India.
“J&K is going to be first UT in India where a separate Finance Commission will be constituted. It will act as a guiding force to regulate finances and improve developmental aspects. FC is going to be constituted shortly,” a senior finance department official said.
“The President shall within two years from the commencement of Jammu and Kashmir Reorganization Act, 2019 and thereafter at the expiration of every fifth year or at such earlier time as the President considers necessary, by order constitute a Finance Commission which shall consist of a chairman and four other members to be appointed by the President,” reads the revised Budget Manual of J&K.
It says that Parliament may by law determine the qualifications for appointment as members of the Commission and the manner in which they shall be selected.
“It shall be the duty of the Commission to make recommendations to the President as to the distribution of the net proceeds of taxes,” it reads.
The Commission shall determine its procedure and shall have such powers in the performance of its functions as Parliament may by law confer on them.
“The President shall cause every recommendation made by the Finance Commission under the provisions of Jammu and Kashmir Reorganisation Act, 2019, together with an explanatory memorandum as to the action taken thereon to be laid before each House of Parliament,” it adds.
It needs to be mentioned that Finance Commissions are periodically constituted by the President of India under Article 280 of the Indian Constitution to define the financial relations between the central government of India and the individual state governments.
The first Commission was established in 1951 under ‘The Finance Commission (Miscellaneous Provisions) Act, 1951’. Fifteen Finance Commissions have been constituted since the promulgation of Indian Constitution in 1950.
The most recent Commission was constituted in 2017 and is chaired by N K Singh, a former member of the Planning Commission.