The commission's chairman was former Reserve Bank of India governor Y. V. Reddy and its members were Sushma Nath, M. Govinda Rao, Abhijit Sen, Sudipto Mundle, and AN Jha.
The recommendations of the commission entered force in April 2015; they take effect for a five-year period from that date.
The fourteenth finance commission is of the view that tax devolution should be the primary route of resources to the states.
The commission recommends to increase the tax devolution of the divisible pool to states to 42% for years 2015 to 2020.
The commission recommended that the new tax devolution should be the primary route of transfer of resources to States since it is formula based and thus conducive to sound fiscal federalism.
The commission had allocated grants and also identified many sources of income for local bodies and provided the guidelines to Union and State governments to empower them.
The grants by Union government are to be used only on the basic services within the functions assigned to them by legislation, water supply, sanitation, sewerage, storm water drainage, solid waste management, street lighting, local body roads and footpaths, parks, playgrounds etc.
In case of any delay, the State Governments have to pay the installment with interest paid from its own funds.
Devolution to special States The commission recommended the Union to establish GST compensation fund.
This additional fiscal burden on the Union government has to be taken as investment to get yields in the medium and long run.
The commission recommended to review the reimbursement of expenditure incurred by the defense forces to not hinder their efficiency during disaster relief.
The commission recommended the Union Government to expedite the development and scientific validation of the Hazard Vulnerability Risk Profiles of States.
The Electricity Act, 2003, currently does not have any provision of penalties for delays in the payment of subsidies by State Governments.
The commission recommended to give new connections in urban bodies only when the functioning meters are set up.
The commission recommended that a Financial Sector Public Enterprises Committee be appointed to examine and recommend parameters for appropriate future fiscal support to financial sector public enterprises, recognizing the regulatory needs and the multiplicity of units in each activity.
The commission recommended to categorize public sector companies as high, low and non priority to decide current policy and future course of action.