New Delhi: Finance Commission held discussions with the finance ministry on fiscal and economic management as well as rationalisation of expenditure related to centrally sponsored schemes, an official statement said on Thursday.
During the meeting, which happened on Wednesday, the 15th Finance Commission observed that the GDP numbers suggest continued high growth over the medium term even though there have been fluctuations within the overall global trend.
"On the expenditure trend, there were discussions with regard to the rationalisation of the Centrally Sponsored Schemes in sync with the new life cycle, they being co-terminus with the finance commissions," the statement said.
Centrally sponsored schemes are schemes that are implemented by state governments but are funded by the Centre with some portion of funding being borne by states.
The Commission also noted that the revenue projections on direct taxes are healthy though on indirect taxes, there have been periodic fluctuations.
"The Commission held consultations with senior officials of the Ministry of Finance yesterday on the overall economic situation and key economic variables," it added.
The ministry officials who attended the meeting included Finance Secretary Subhash Chandra Garg, Revenue Secretary Ajay Bhushan Pandey, Expenditure Secretary Girish Chandra Murmu, Chief Economic Adviser Krishnamurthy Subramanian, CBDT Chairman P C Mody, CBIC Chairman P K Das.
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The 15th Finance Commission, chaired by N K Singh, has also held discussions over the last few months with the ministry on the issues related to UDAY and 7th Pay Commission, particularly in the context of the finances of the states.
The ministry presented before the Commission some preliminary views of the government on the financial terms of reference of the Commission.
The economic development in the last 5 years was analysed in detail with specific focus on growth, investments, industrial production, banking and payments, inflation and monetary policy, external sector, medium-term outlook.
The ministry made its projections for 2019-20 to the Commission along with its projections for the tenure of the 15th Finance Commission (2020-21 to 2024-25), the statement said.
The ministry's resource forecast included tax projections; and a comparative picture of tax growth and buoyancy. The expenditure projections made by the ministry included expenditure classifications and requirements; expenditure of the Centre during the tenure of the Commission.
"The ministry and the Commission had a detailed discussion on fiscal management in which the ministry put up a number of suggestions for consideration of the Commission. Discussions were also held on GST issues, local body grants and population data," it added.
The 15th Finance Commission will make recommendations by October 2019 for five years commencing April 1, 2020.
