The necessity of setting up 'State Finance Commissions' was discussed in a meeting between RBI Governor Shaktikanta Das and Finance Commission Chairman N.K. Singh.

The 15th Finance Commission headed by Chairman Singh on Wednesday held a detailed meeting with the Governor and Deputy Governors of RBI here.

According to RBI, one of the key issues discussed during the meeting was the necessity of setting up 'State Finance Commissions' for state governments.

Besides, issues such as public sector borrowing requirements and continuity of the Finance Commission were also discussed.

"It was felt that this (continuity of the Finance Commission) was required more in view of the fiscal management requirements of the states, especially given the absence of mid-term reviews of awards granted by the Finance Commission, as it used to happen earlier with the awards granted by the Planning Commission," RBI said in a statement.

Other issues, especially on the need for expenditure codes and role of states in growth and inflation, were also discussed.

Additionally, in its presentation to the Finance Commission, RBI pointed out the importance of states in the economy "has increased with the shift in composition of government finances".

"Specific factors drive fiscal slippages: these factors include UDAY () in the past and farm loan waivers and income support schemes in 2018-19 RE,".

"Outstanding debt as percentage of GDP rising despite moderation in interest payment as percentage of revenue receipts."

During its two-day visit to Mumbai, the Finance Commission is slated to have meetings with banks, financial institutions and economists as well.