 "16th Finance Commission: Chairman Panagariya discusses ToR in first meet")
The 16th Finance Commission (FC) on Wednesday held its first meeting under the chairmanship of Arvind Panagariya to discuss its Terms of Reference (ToR), a press statement said.
The 16th FC would carry out detailed analytical work and rope in expertise from leading research organisations and think tanks working in the domain of fiscal federal relations, the statement said.
The distribution of the net proceeds of taxes between the Union and states under Chapter I, Part XII of the Constitution and the allocation of the respective shares of such proceeds between states are among the ToR approved by the Cabinet.
Another ToR is about the principles governing the grants-in-aid of the revenues of states out of the Consolidated Fund of India and the sums to be paid to states by way of grants-in-aid of their revenues.
The FC, according to the ToR would also suggest measures needed to augment the Consolidated Fund of a State to supplement the resources of panchayats and municipalities.
“The XVI-FC acknowledged the need for wide-ranging consultations with various stakeholders, including state governments, local bodies, ministries of the government of India, and experts,” the press statement added.
More From This Section
The meeting was held at the Jawahar Vyapar Bhawan in New Delhi.
The FC will make its recommendations available by October 31, 2025, covering an award period of five years, commencing April 1, 2026.
The full-time members of the Commission include Ajay Narayan Jha, member of 15th FC and former secretary of expenditure, Annie George Mathew, former special secretary of expenditure, and Niranjan Rajadhyaksha, executive director of Artha Global.
Soumya Kanti Ghosh, the group chief economic advisor of the State Bank of India, was appointed a part-time member of the Commission.
The FC is a constitutionally mandated body established once every five years to devise a formula for distributing the net tax proceeds between the Centre and the states as well as among states and local bodies.
Currently, India shares 41 per cent of federal taxes with states as recommended by the 15th panel.