New Delhi: The fifth meeting of the Economic Advisory Council of the Fifteenth Finance Commission (XVFC) was held in New Delhi today. Chairman and Members of the XVFC, members of the Advisory Council and some special invitees attended the meeting.
Advisory Council Members were updated by the Commission regarding the additional terms of reference extending XVFC’s term till October 2020. Additional ToRs also asked the Commission to submit two reports – one, for the year 2020-21 and a second report for the five year period of 2021-22 to 2025-26.
The Advisory Council was informed about submission of the 2020-21 report, and now the Commission is on its next task of preparing the report for 2021-26 period.
Among other things, the issues of possible macro assumptions for the Commission’s award period relating to real growth and inflation were discussed in detail. Issues like the structural shift in inflation, the relationship between the GDP deflator and the consumer price inflation and possible trajectories of movement in real activity were discussed.
Tax revenues and expenditure patterns emerging both at the Union and the States level were also part of the discussion, as well as possible ways to improve tax collection for additional resource mobilization.
Issues related to stabilization of Goods & Services Tax (GST), relationship between GST Council and Finance Commission and GST compensation being paid to States were discussed, as also those related to compliance and adherence to Fiscal responsibility legislations (FRLs) enacted by respective governments. The need to bring in fiscal transparency was underlined in the discussions.
The Advisory Council Members present were M Govinda Rao, Indira Rajaraman, Sudipto Mundle, Omkar Goswami, Arvind Virmani, Surjit Bhalla and Prachi Mishra.
The Special invitees to the meeting included Ajit Mishra, IEG; Manoj Panda, IEG; Rathin Roy, NIPFP; Kavita Rao, NIPFP; Puja Mehra, Economist.
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