The Commission will start functioning from 01 January 2024. The Chairman and other Members of the Commission will hold the office for a period of nine months ending 30 September 2024. 

The Commission will review the financial position of the Panchayats and Municipalities and make recommendations relating to the following matters, namely:- 

(a) the distribution between the Administrations of the Union territories of Andaman and Nicobar Islands, Dadra and Nagar Haveli and Daman and Diu, Ladakh and Lakshadweep and their respective Panchayats and Municipalities of the net proceeds of the taxes, duties, tolls and the fees leviable by the respective Union territory Administration; 

(b) the determination of the taxes, duties, tolls and fees which may be assigned to, or appropriated by the Panchayats and Municipalities of the Andaman and Nicobar Islands, Dadra and Nagar Haveli and Daman and Diu, Ladakh and Lakshadweep; 

(c) the grants-in-aid to the Panchayats and Municipalities of the Andaman and Nicobar Islands, Dadra and Nagar Haveli and Daman and Diu, Ladakh and Lakshadweep from the Consolidated Fund of India; 

(d) the measures needed to improve the financial position of the Panchayats and Municipalities in the Andaman and Nicobar Islands, Dadra and Nagar Haveli and Daman and Diu, Ladakh and Lakshadweep and to improve their capacity to enlarge their resource base. 

In making its recommendations, the Commission shall, inter alia, have regard to:-

a) the objective of balancing the receipts and expenditure on revenue account of the Andaman and Nicobar Islands, Dadra and Nagar Haveli and Daman and Diu, Ladakh and Lakshadweep and their Panchayats and Municipalities; thereafter, in a manner that sufficient surplus is generated for capital investments; 

(b) the need for ensuring reasonable returns on the investments by the Panchayats and Municipalities in commercial undertakings, power projects, public sector enterprises, and such other institutions; 

(c) the revenue resource of the Panchayats and Municipalities based on the existing resources and taxes, duties, tolls and fees proposed to be levied or appropriated by the Panchayats and Municipalities, to coincide with the period of the National Finance Commission and also assess the expenditure needs for this period and the broad areas of development to be undertaken by the Panchayats and Municipalities; 

(d) the long-term perspective plans and developmental goals of the Andaman and Nicobar Islands, Dadra and Nagar Haveli and Daman and Diu, Ladakh and Lakshadweep, the order of investments required to achieve these goals and the possible sources for the required resources; 

(e) the scope for better fiscal management consistent with efficiency and economy in expenditure; 

The Commission may also evolve a system for monitoring physical progress of project or schemes against financial outlays made available. In making its recommendations on the various matters aforesaid, the Commission will adopt the latest population figures as of 2011 census in all such cases where population is a factor for providing the grants-in-aid or for the assessment of taxes, duties, tolls, fees and such other matters, to the Panchayats and Municipalities. 

The Commission shall make its report available within a period of nine months, from the date of its constitution, and the Commission shall indicate the basis on which it has arrived at its finding and make available the Panchayat-wise and Municipalities-wise estimates of receipts and expenditure.