The tenure of the 15 Finance Commission is ending on November 30, but sources privy to the developments told CNBC-TV18 that the government is likely to give a one-year extension.
The commission was scheduled to finalise its report by November 10 this year.
The government on November 27, 2017, notified the 15th Finance Commission, headed by N K Singh, to suggest, among other things, the formula for devolution of funds to states by the Centre for five years commencing April 1, 2020.
The commission was constituted in the backdrop of various major fiscal /budgetary reforms introduced by the government in the past 4 years, like closure of the Planning Commission and its replacement by NITl Aayog, removal of distinction between non-plan and plan expenditure, advancing the budget calendar by one month and passing of the full budget before commencement of the new financial year, introduction of Goods and Services Tax (GST) from July 2017 and new FRBM architecture with debt and fiscal deficit path.
The commission, which has been mandated to use 2011 census data, rather than the one of 1971 for resource allocation, was to submit its report by October 30, 2019, for 5 years - between 2020-2025.