Government extends the 14th Finance Commission's term by two months

New Delhi: Government has extended the term of the 14th Finance Commission by two months to December 31.

"The proposal of extension of time period by two months for submission of report by the Fourteenth Finance Commission has been considered and approved by the Cabinet," an official release said.

The Commission had sought two months' extension for the submission of its report by up to December 31, 2014 to examine financial projections, carry out consultations with the government of Andhra Pradesh and Telangana in view of additional term of reference made to it.

It is to make recommendations for the successor states on reorganisation of the Andhra Pradesh in accordance with Andhra Pradesh Reorganisation Act, 2014.

Andhra Pradesh Chief Minister N Chandrababu Naidu has sought liberal assistance from the Commission to help the state, which is facing financial problems including big budget deficit, following its division and creation of Telangana.

The 14th Finance Commission was constituted in January 2013 to recommend, among other things, distribution of taxes between the Centre and states as well to suggest measures for maintaining a stable and sustainable fiscal environment.

The Commission was to submit its report on the basis of its terms of reference by October 31, 2014 covering a period of five years from April 1, 2015 to March 31, 2020.