The 15th Finance Commission led by N.K. Singh held its first meeting this week. The tasks before it are unique in the sense that it has to make its recommendations after the rules of fiscal federalism have been profoundly reset by the introduction of the goods and services tax (GST). This is the first finance commission that will do its work under the new tax system. The Constitution empowers the finance commissions to go beyond the core issues of how to divide taxes vertically between New Delhi and the states on the one hand and horizontally between states on the other. The three central tasks of the 15th Finance Commission will be to strengthen cooperative federalism, frame the incentives needed to shift public spending in the desired direction, and do all this without compromising fiscal stability.

(Live Mint)