Term of 15th Finance Commission Extended

15th Finance Commission

In News

The government has decided to extend the term of the 15th Finance Commission to October 30, 2020.


  • The 15th Finance Commission is expected to terminate after the submission of the financial year 2020-21 report before the budget.
  • But, the government has decided to extend its duration till October 30, 2020, to facilitate the Commission to submit a second report for the period 2021-26.
  • This means the recommendations of the Commission will be applicable for six years than the conventional five-year period.
  • As per a government press release, “The extension of the term will enable the Commission to examine various comparable estimates for financial projections in view of reforms and the new realities to finalise its recommendations for the period 2020-2026.”

Is It New?

  • The extension of the term of a Finance Commission is not at all new.
  • Earlier, the term of the 14th Finance Commission was extended due to the bifurcation of Andhra Pradesh and Telangana.
  • Similarly, this time too there was a restructuring of states in the form of Jammu & Kashmir and Ladakh becoming Union Territories.
  • During times of restructuring, the Commission has to rework on the calculations for the allocation of financial resources to the states.
  • Also, the 9th Financial Commission under the chairmanship of N.K.P. Salve saw its recommendation period extending to six years.
  • The government is of the opinion that the extension will lead to medium-term resource planning for state and central governments.

Finance Commission

  • Under Article 280 of the Indian Constitution, the President of India must form a Finance Commission to determine the financial relations between the central and state governments.
  • The current Finance Commission is chaired by N.K. Singh.
  • Under the Finance Commission (Miscellaneous Provisions) Act, 1951 the government has the power to extend the term of the Commission. 
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