On Sunday, the government announced the appointment of Arvind Panagariya, former Vice-Chairman of Niti Aayog and Professor at Columbia University, as the Chairman of the 16th Finance Commission. The role of the commission’s secretary will be fulfilled by Ritvik Ranjanam Pandey, Joint Secretary in the finance ministry, according to a government notification.
The President has formally constituted the Finance Commission, with Dr. Arvind Panagariya at the helm, and the names of the other commission members will be notified separately, as per the official statement. The commission is tasked with submitting its report covering the five-year period from 2026-27 to 2030-31 to the President by October 31, 2025.
The Union Cabinet, led by Prime Minister Narendra Modi, had previously sanctioned the Terms of Reference (ToR) of the 16th Finance Commission in the last month. The commission’s responsibilities encompass proposing tax devolution between the Centre and states, recommending revenue augmentation measures, and conducting a review of the current financing arrangements for disaster management initiatives, specifically the funds established under the Disaster Management Act, 2005.
The Finance Commission, a constitutional entity, plays a crucial role in providing recommendations on financial relations between the central and state governments. In the preceding 15th Finance Commission under NK Singh, recommendations included allocating 41 percent of the divisible tax pool of the Centre to states during the five-year period from 2021-22 to 2025-26, consistent with the proposal of the 14th Finance Commission.