Government Appoints Four key Members of the Sixteenth Finance Commission

The government has taken a significant step in shaping the Sixteenth Finance Commission (SFC) by appointing 4-key members, three of whom are designated as full-time members. The Commission, headed by Shri Arvind Panagariya, former Vice-Chairman of NITI Aayog, was constituted on December 31, 2023.

Appointed Members

Sixteenth Finance Commission: Dr. Arvind Panagariya Appointed Chairman

Context

In adherence to Article 280(1) of the Constitution, the Government of India, with the President’s approval, has established the Sixteenth Finance Commission. Dr. Arvind Panagariya, former Vice-Chairman of NITI Aayog and Professor at Columbia University, assumes the role of Chairman. Shri Ritvik Ranjanam Pandey has been appointed as the Commission’s Secretary, and detailed terms of reference have been outlined in the official notification.

Key Appointments

• Chairman: Dr. Arvind Panagariya
• Secretary: Shri Ritvik Ranjanam Pandey

Terms of Reference

The Sixteenth Finance Commission is tasked with making recommendations on three crucial matters:

1. Distribution of Net Proceeds:

• • Allocation of taxes between the Union and the States under Chapter I, Part XII of the Constitution.
  • Division of respective shares among the States.

2. Grants-in-Aid:

• • Principles governing grants-in-aid to States’ revenues from the Consolidated Fund of India.
  • Sums to be granted under Article 275 for purposes other than specified in the provisos to clause (1) of that article.

3. Resource Augmentation:

• • Measures to enhance a State’s Consolidated Fund for supporting Panchayats and Municipalities, based on State Finance Commission recommendations.

Additional Mandate

The Commission will also review financing arrangements for Disaster Management initiatives, aligning with the Disaster Management Act, 2005, and provide relevant recommendations.

Timeline

The Sixteenth Finance Commission is expected to submit its comprehensive report by October 31, 2025, covering a five-year period starting from April 1, 2026.