Recommendations
With regard to the terms of reference the following were the recommendations made by the Commission:
- The total share of the States in the net proceeds of central taxes and duties would be 29.5% for the next five years
- With regard to the revenue deficit grants to States, a lumpsum amount of Rs. 11,000 crore in the Central Budget 2000-2001.
- Grants
- For the five years commencing from April 1, 2000, Rs.4,972.63 crore be given for upgrading of standards of administration and specific grants to certain States for special problems.
- For the five years commencing from April 1, 2000, Rs.10,000 crore for local bodies, to be directed for maintenance of civic services, Rs.1600 crore per annum is for rural local bodies and Rs.400 crore per annum is for urban local bodies.
- With reference to the Grants-in-Aid under Article 275 (1) of the Constitution, which amounts to a total of Rs. 35359 crore for the period 2000-2005 to be provided to such States (15 States) which will have deficit non-plan revenue account even after the devolution of central tax revenues, equal to the amount of deficits assessed during the period 2000-2005.
- With regard to the Calamity Relief Funds in States with an aggregate size of Rs. 11007.59 crore during 2000-2005.
- The tax devolution from the Centre to the State should not exceed 37.5% of total Centre’s revenues this should be inclusive of the Central taxes/duties to States and grants-in-aid to States.
The Commission recommended that each State be given a share as specified the net proceeds of all shareable union taxes and duties except the expenditure tax and service tax.
Data for percentage share for certain states is Bihar-14.597, Maharashtra-4.632, Kerala-3.057, Uttar Pradesh-19.798, Punjab-1.147
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