New Delhi: The union cabinet Wednesday accorded its nod for setting up of the 15th Finance Commission to work out the formula for devolution of Central funds to states.

The union finance minister, Arun Jaitley, soon after the cabinet meeting, said the members of the FFC  and its terms of reference will be notified in the due course of time. The FFC is required to submit its recommendation before April 1, 2020. The award period of 14th Finance Commission is coming to end on March 31, 2020. The FtFC was constituted on January 2, 2013 and its award period started from April 1, 2015..

The Commission, as per Article 280 of the Constitution, is required to make recommendations on the distribution of the net proceeds of taxes between the Centre and the states. The Commission also suggests the principles which should govern the grants in aid of the revenues of the states out of the Consolidated Fund of India.

As the nation has switched over to GST regime from July 2017, the FFC  will have to take into account the impact of the GST on the resources of the central as well state governments.