Sixteenth Finance Commission Constitutes Five-Member Advisory Council

The Sixteenth Finance Commission has constituted an advisory council with five members to advise the Commission on any of the Terms of Reference (ToR) or related subjects. The Finance Commission, as per the ToR, will also suggest measures to augment the Consolidated Fund of a State to supplement the resources of panchayats and municipalities.

Advisory Council Members

Poonam Gupta, Director General of the National Council of Applied Economic Research, has been appointed as the convenor of the Advisory Council. The other members are:

  • D.K. Srivastava, Chief Policy Advisor at EY
  • Neelkanth Mishra, Chief Economist at Axis Bank
  • Pranjul Bhandari, Chief India Economist at HSBC Securities & Capital Markets
  • Rahul Bajoria, MD & Head of EM Asia (ex-China) Economics at Barclays

Role and Functions of the Advisory Council

The advisory council will assist the Commission in

  • Preparing papers or research studies
  • Monitoring or assessing studies commissioned by the Finance Commission
  • Enhancing the Commission’s understanding of issues in its ToR
  • Broadening the Commission’s ambit and understanding by seeking the best national and international practices on fiscal devolution

Terms of Reference (ToR)

The ToR approved by the Cabinet include

  • Distribution of net proceeds of taxes between the Union and states under Chapter I, Part XII of the Constitution
  • Allocation of respective shares of such proceeds between states
  • Principles governing the grants-in-aid of the revenues of states out of the Consolidated Fund of India
  • Sums to be paid to states by way of grants-in-aid of their revenues

Constitutional Mandate

The Finance Commission is a constitutionally mandated body established every five years to devise a formula for distributing net tax proceeds between the Centre and the states as well as among states and local bodies. Currently, India shares 41% of federal taxes with states as recommended by the 15th panel.

Piyush Shukla

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