NEW DELHI: The Union Cabinet on Wednesday approved an amendment enabling the 15th Finance Commission to address “concerns regarding the allocation of adequate, secure and non-lapsable funds for defence and internal security of India”.
The amendment says that the 15th Finance Commission shall “examine whether a separate mechanism for funding of defence and internal security ought to be set up and, if so, how such a mechanism could be operationalised.” The 15th Finance Commission was set up by the President on November 27, 2017 for five years.
Currently, the Centre-state formula for resource sharing as drawn up by previous finance commissions is 58:42. Experts do not expect that formula to be changed, though there has been speculation that such a formula change might be in the offing. However, economists said that the change in this finance commission’s terms of reference was not really needed in the normal course.
“It is something which the Centre can do create a non-lapsable fund for defence and security on its own. The Finance Commission need not go into this. It is understood that defence and federal policing is the Centre’s job and is to be paid from the centre’s pool of resources,” pointed out M Govinda Rao, former member of the PM’s Economic Advisory Committee. The Cabinet also approved extending the terms of the fifteenth Finance Commission by one month from October 30, 2019 to November 31, 2019.
Amendment to Companies Act
The Cabinet also approved a bill to amend the Companies Act, 2013, to replace an ordinance issued in 2019. “The proposed amendments will lead to further promotion of ease of doing business, de-clogging of National Company Law Tribunal and Special Courts,” said an official release, adding, “The amendments will benefit law abiding corporates while simultaneously plugging gaps in the corporate governance and compliance framework enshrined in the Companies Act, 2013.”
Northeast Infra Projects
The Cabinet also cleared a few important North-East projects, including doubling the length of the New Bongaigaon-Agthori railway line via Rangiya at an estimated cost of `2,042.51 crore and approved an expenditure of `1,600 crore on pre-investment activities.