The Central government, endorsed by the President, has established the Sixteenth Finance Commission, entrusting Arvind Panagariya, former Vice-Chairman of NITI Aayog and current Columbia University Professor, as its Chairman, alongside Ranjanam Pandey as the appointed Secretary. Additional members will be announced separately.
This commission has a pivotal role in proposing the distribution of net tax proceeds between the Union and the states, as well as allocating shares of these proceeds among the states. Furthermore, it will formulate recommendations concerning the principles guiding grants-in-aid from the Consolidated Fund of India to the states and the financial support granted to panchayats and municipalities based on state commission suggestions.
An integral part of the commission's responsibilities includes reviewing the financing mechanisms for disaster management initiatives, specifically referencing funds established under the Disaster Management Act of 2005 (53 of 2005), aiming to provide appropriate recommendations in this regard.
The commission has been tasked with delivering its comprehensive report by October 31, 2025, encompassing a five-year period starting from April 1, 2026. This report will encompass critical financial recommendations and strategies pertinent to the Union and states' fiscal frameworks and resource allocations.
(With Agency Inputs)
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