Business: The government has extended the tenure of the 16th Finance Commission by one month to 30 November. It was formed on 31 December 2023. Its chairman was Arvind Panagariya, former vice-chairman of NITI Aayog. This commission was to submit its report by 31 October. The commission will primarily make recommendations on distribution of taxes between the Center and states for a period of 5 years starting from April 1, 2026.
In a notification issued on October 10, the Finance Ministry said that the date for submitting the report of the 16th Finance Commission is being extended till November 30. The Commission has four members and is assisted by Secretary Ritwik Pandey, two Joint Secretaries and an Economic Advisor.
Retired bureaucrat Annie George Mathew and economist Manoj Panda are full-time members of the commission. SBI Group Chief Economic Advisor Soumya Kanti Ghosh and RBI Deputy Governor T Rabi Shankar are its part-time members.
This commission will suggest tax devolution and revenue enhancement measures between the Center and the states. Apart from this, the Commission will review the current arrangements for the management and financing of the funds constituted under the Disaster Management Act 2005. The Finance Commission is a constitutional body that gives suggestions on Centre-State financial relations.
The previous 15th Finance Commission under the leadership of NK Singh had recommended that states be given 41 per cent of the Centre’s divisible tax pool over a five-year period, i.e. 2021-22 to 2025-26. Earlier, the same share was decided by the 14th Finance Commission under the leadership of YV Reddy.
