Key Points
The government is likely to ask the next Finance Commission to consider a higher weight for the human development index (HDI) and sustainable development goals (SDGs) while recommending the distribution of resources among states..
The government is currently finalising the terms of reference for the 16th Finance Commission, which is likely to be set up shortly..
The commission may also be asked to look at the conditions attached to fiscal transfers to urban and rural local bodies, to ensure that the funds are effectively utilised, a senior official aware of the discussions told ET..
The terms of reference could include consideration of climate issues while deciding distribution of funds among states keeping in view India's commitment to climate financing and to prepare states and cities to tackle future adverse weather conditions and natural disasters, the official said...
The total central grant to local governments is estimated to be 4.36 lakh crore for the 15th Finance Commission period (FY22-FY26), of which 2.36 lakh crore is earmarked for rural local bodies and 1.21 lakh crore for urban local bodies...
