The Union Cabinet has approved the constitution of the 14th Finance Commission to suggest formula for sharing of tax proceeds between Centre and states.

A senior minister said after the cabinet meeting that the government has cleared setting up of the 14th Finance Commission.

Our correspondent reports Finance Commission is a constitutional body set up every five years. Besides other things, the Commission lays down principles governing the grants-in-aid to states and other local bodies for five-year period beginning April 1, 2015.

The Cabinet also approved setting up of a National Automotive Board, NAB a body which would act as a facilitator between the government and the industry and promote Research and Development activities in the sector.

NAB will be a specialised body for promoting sustainable development of the Indian auto sector.