Govt Approves 16th Finance Commission's Mandate, Extends PMGKAY Till 2028
Govt Approves 16th Finance Commission's Mandate, Extends PMGKAY Till 2028

NEW DELHI: During a late-night meeting on Tuesday, Prime Minister Narendra Modi-led Union Cabinet sanctioned the terms of reference for the 16th Finance Commission. Information and Broadcasting Minister Anurag Thakur revealed on Wednesday that while the commission members are yet to be selected, their mandate has been endorsed.

Additionally, the Cabinet prolonged the tenure of the Pradhan Mantri Garib Kalyan Ann Yojana (PMGKAY) for an additional five years, starting from January 1, 2024. An allocation of Rs. 11,80,000 crore has been earmarked for the scheme, which offers free rations to the impoverished, Thakur confirmed.

Originally launched during the pandemic to aid individuals amidst widespread lockdowns, the PMGKAY scheme has been instrumental in supporting the underprivileged, Minister Thakur emphasized. "Over 80 crore people have benefited from the PMGKAY scheme, and it has now been extended for another five years," he stated.

Under PMGKAY, Antyodaya Anna Yojana households, representing the poorest families, are entitled to 35 kg of foodgrains per family per month, while priority households receive five kg per person monthly.

Currently, up to 75% of the rural population and 50% of the urban population fall within the AAY households and priority households categories.

Minister Thakur also announced that the 16th Finance Commission is expected to submit its report by October 2025. "These recommendations will be effective for five years, spanning from April 1, 2026, to March 31, 2031," he added.

The terms of reference for the 16th Finance Commission hold significance in the allocation of tax revenue between the union government and states, as well as among states, thereby influencing overall income redistribution.

The commission is set to provide recommendations for tax devolution, reforms, tax administration efficiency, and expenditure reforms. Tax devolution plays a crucial role in funding state initiatives for development, welfare, and priority sectors. Presently, states receive 14 instalments from the union government in a fiscal year, constituting 41% of the taxes collected. The share of net proceeds recommended for state devolution has risen from 29.5% in the 11th Finance Commission to 42% in the 14th Finance Commission.

Moreover, the government sanctioned a program to provide drones to 15,000 women's self-help groups, enabling them to lease these drones to farmers. The central government will cover 80% of the drones' cost and accessories, in addition to training women pilots and co-pilots, along with a monthly stipend. Selected self-help group members will undergo mandatory five-day drone pilot training and an additional 10-day training for nutrient and pesticide application. The estimated capital outlay for this initiative stands at Rs. 1,261 crore over the next four years.

"This initiative aligns with PM Modi’s 'lakhpati didi' vision. Approximately 10 crore women are part of self-help groups," highlighted Thakur. "Drones will significantly enhance the efficiency of fertiliser and pesticide spraying," he added.

During the Tuesday night meeting, the union cabinet also greenlit the Pradhan Mantri Janjati Adivasi Nyaya Maha Abhiyan (PM-JANMAN) scheme, aimed at implementing 11 critical interventions across various ministries to assist members of tribal communities. Specifically, 75 such communities in 18 states and the Union Territory of Andaman and Nicobar Islands have been identified as particularly vulnerable tribal groups (PVTGs).

The government intends to extend diverse forms of aid to PVTGs, encompassing social, economic, and educational spheres. For instance, the Ministry of Ayush's wellness centers and facilities will reach PVTG habitations through mobile medical units.

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