The union Cabinet is likely to discuss constitution of the 14th Finance Commission and setting up of the National Automotive Board tomorrow.
The 14th Finance Commission will advise on devolution of the Centre's taxes between Centre and states, besides other components of the federal structure of the Indian economy for the 2015-20 period.
Former Reserve Bank governor Y V Reddy has emerged as a front-runner for the post of chairman of the Commission. Officials said finance minister’s former advisor, Parthasarthi Shome, and former finance secretary Sushma Nath could be appointed as the other members of the Commission.
However, the Cabinet is likely to clear the terms of reference of the Commission tomorrow and not name of the chairman.
The National Automotive Board has been designed as a specialized body for promoting sustainable development of the Indian auto sector. Officials said it will also act as a facilitator between the Government and the industry, promote research and development activities and have a larger role in developing skills for the growing automobile sector.
The Board will have members from the Department of Heavy Industry, Planning Commission and various ministries, including Road Transport and Highways, Science and Technology, Environment and Forests, besides scientists and industry representatives.
Meanwhile, the Finance Commission might also look at the issue of giving a moratorium on repayment of loans of debt-ridden states. West Bengal has been asking for a moratorium on its interest and repayments of about Rs 22,000 crore for the next three years. The Centre’s dilemma is that the 13th Finance Commission had identified West Bengal, Kerala and Punjab as revenue-deficit states in 2007 and a moratorium to one state would mean extending the same benefit to the others, too.
The Commission might also look at the impact of the proposed Goods & Services Tax (GST). Though the 13th Finance Commission had also looked at the issue, the delay in the new indirect tax regime might call for a fresh look, especially in the light of issues raised by the states with regard to Central Sales Tax compensation and loss of autonomy in the GST regime.
An Officer on Special Duty has been appointed to help finalise the terms of reference and decide on a place for the Commission’s secretariat, along with other administrative issues.
