The Central government has constituted the 16th Finance Commission in pursuance to Article 280(1) of the Constitution. Dr Arvind Panagariya, former vice-chairman, NITI Aayog, and professor at Columbia University, will be its chairman.
Members of the 16th Finance Commission would be notified separately. Ritvik Ranjanam Pandey has been appointed secretary to the Commission.
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Detailed terms of reference for the Finance Commission have also been spelt out in the notification issued on Sunday by the Finance Ministry.
The Commission will make recommendations on the distribution between the Union and the states of the net proceeds of taxes which are to be or may be, divided between them.
The panel will also make recommendations on the principles to govern the grants-in-aid of the revenues of the states out of the Consolidated Fund of India and the sums to be paid to the states by way of grants-in-aid of their revenues and the measures needed to augment the Consolidated Fund of a state to supplement the resources of the panchayats and municipalities in the state based on the recommendations made by the Finance Commission of the state.
The Commission may review the present arrangements on financing disaster management initiatives, with reference to the funds constituted under the Disaster Management Act, 2005 (53 of 2005), and make appropriate recommendations thereon.
The panel has been requested to make its report available by 31 October 2025 covering five years commencing on 1 April 2026.
