Govt issues bare minimum terms of reference for 16th finance commission

Snapping past tradition, the Narendra Modi government has issued the bare minimum terms of reference (ToRs) to the 16th Finance Commission, naming former Niti Aayog Vice-Chairman Arvind Panagariya as its chairman and bureaucrat Ritvik Ranjanam Pandey as its secretary. The ToRs for the Commission strictly align with what is broadly enshrined in the Constitution. Commissions are set up under Article 280 to provide recommendations on the devolution of central taxes to states and the principles governing grants in aid from the Centre to states out of the Consolidated Fund of India.

Recently, Commissions have also been giving recommendations for augmenting resources of municipalities and panchayats, in line with respective state finance commission reports, and for financing disaster management initiatives. Article 280 also empowers the President to refer any other matter to the Commission in the interests of sound finance. It is under this provision that the Union Government issues terms of reference to the commission, which are beyond the minimum ToR.