Ninth Finance Commission

The Ninth Finance Commission of India was set up in June 1987 under the chairmanship of Mr. N.K.P Salve.

Members

The members of the Commission were:

Shri N.K.P. Salve, Chairman
Shri Justice Abdus Sattar Qureshi
Dr. Raja J. Chelliah
Shri Lal Thanhawla, resigned on 24 January 1989
Shri Mahesh Prasad, Member Secretary, resigned during the term of the Commission
Shri S. Venkitaramanan, joined in place of Shri Lal Thanhawla on 3 May 1989
Shri Venkitaramanan, resigned as Member of the Finance Commission on his appointment as Adviser to the Government of Karnataka
Shri R. Keishing, assumed charge as part-time Member of the Commission with effect from 25 November 1989.
Shri K.V.R. Nair, appointed as Member Secretary in place of Shri Mahesh Prasad from 13 July 1989

Recommendations

Income Tax – 85% of the divisible pool of the income tax to be assigned to the state and out of the net distributable proceeds a sum equal to 1.437% should be deemed to represent the proceeds attributable to the Union Territories.Relief Funds – The existing arrangements to be replaced by a new order under which the states will have greater autonomy and accountability. A calamity relief fund to be constituted for each state to which contribution is to be made in the ratio 75:25.Debt Relief – The Commission recommended that the Reserve Bank of India may work out a formula for amortization of the states’ market borrowings. From 1990 to 1991 the direct central loans for states’ plans should have a maturity period of 20 years with 50% of the loans enjoying a grace period of 5 years. The loans given to the federating states for drought relief during 1986–89 as outstanding on 31 March 1989 are to be waived. The state plan loans advance to the states during the 1984–89 period and outstanding on 31 March 1990 should be consolidated, rescheduled to 15 years in the case of all the states.