Finance Commission confronts fiscal prudence challenges with minimal ToR

Experts say minimum ToR issued to avoid controversies and simplify state memoranda

Breaking away from precedent, the government has issued bare minimum terms of reference (ToR) to the proposed 16th Finance Commission, limiting it to what is broadly enshrined in the Constitution. Nonetheless, the commission cannot avoid addressing issues of fiscal prudence and sustainability even if this ToR is retained, say experts.

Some experts, who were part of previous commissions, also feel that the government may refrain from issuing additional ToR to avoid controversies and the awkward position of rejecting uncomfortable recommendations.

The Union Cabinet recently approved ToR for the 16th Finance Commission, according to which the body would make recommendations on