New Delhi: Former RBI Governor Y V Reddy was on Wednesday appointed Chairman of the 14th Finance Commission to suggest principles of sharing of revenues between the Centre and the states and insulate pricing of public utilities like electricity, water and public transport from policy fluctuations.
Planning Commission Member, Abhijit Sen, former Finance Secretary Sushma Nath, Director of National Institute for Public Finance and Policy M Govinda Rao and former National Statistical Commission acting Chairman Sudipto Mundle will be the other members of the Commission.  Ajay Narayan Jha will be the Commission's Secretary.
Widely respected for his understanding of economics and public finance, 71-year-old Reddy, a former Banking Secretary at the Centre, was RBI Governor for five years from 2003.

Announcing the Constitution of the Commission, Finance Minister P Chidamabaram said the Commission has been asked to give its report by October next year and the recommendations will come into effect from April, 2015 for a five-year period.

The Commission, set up under Constitutional provisions, will also go into issues like disinvestment, GST compensation, sale of non-priority PSUs and subsidies.

Among other things, the Commission would look into the "need for insulating the pricing of public utility services like drinking water, irrigation, power and public transport from policy fluctuations through statutory provisions".

Asked whether the government is giving a signal for price hike of public utilities, Chidambaram said, "We are not giving any signal. We are only highlighting matters (relating to) the management of nation's finances over the five year period from 2015 ... These are matters which cannot be ducked or shrugged away. We have to face these matters".

Finance Commission is set up every five years to suggest principles governing the distribution of tax proceeds among Centre, States and local bodies.


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