Finance Commission

State governments have long argued that their space for policy experimentation and autonomy has been shrinking

The Sixteenth Finance Commission has proposed a consolidation roadmap that balances development needs with fiscal prudence

On Agri Stack, Expenditure Secy V Vualnam says it's progressing well; using IT, farmers will be able to choose exact fertiliser quantities needed, reducing crowding at fertiliser outlets

The Sixteenth Finance Commission's transfer framework raises questions on equity and fiscal equalisation as rigid tax devolution and limited grants reshape Centre-state finances

The Union Budget for 2026-27 has also placed a clear bet on urbanisation as an engine of growth

The 16th Finance Commission has retained states' 41 per cent share in central taxes, but changes in the devolution formula mean gains for southern and western states and relative losses for several no

Opposition parties, including ruling dispensations in poll-bound West Bengal, Kerala, Tamil Nadu, said the Budget fails on economic strategy, worsens fiscal stress on states, and undermines federalism

To create incentives for privatisation, the panel said private investors need to be shielded from the accumulated debt burden after discom takeover

Southern states are projected to get a marginal increase

the 16th Finance Commission kept tax devolution at 41%, added GDP contribution as a new criterion, dropped revenue deficit grants, and pushed states towards stronger fiscal discipline

The 15th Finance Commission recommended a share of states in the central taxes to be 41 per cent, and the 16th Finance Commission has retained the vertical share of devolution

The forthcoming Budget would incorporate the recommendations of the 16th Finance Commission which has already submitted its report to President Droupadi Murmu. The Finance Commission, which has been set up under the Constitution, provides a formula for devolution of taxes between Centre and states. Cesses and surcharge levied by Centre are not part of the divisible pool. The Finance Commission is a constitutional body that gives suggestions on Centre-state financial relations and is set up periodically. The 16th Finance Commission, headed by former Vice Chairman of Niti Aayog Arvind Panagariya, was set up on December 31, 2023. Led by Panagariya, Finance Commission members - Retired bureaucrat Annie George Mathew, economist Manoj Panda, SBI Group Chief Economic Advisor Soumya Kanti Ghosh and RBI Deputy Governor T Rabi Sankar - and Secretary to the Commission Ritvik Pandey submitted its report to Murmu on November 17, 2025. The Commission also presented a copy of the report to Prime

An examination of Finance Commission awards from the 11th to the 15th shows that transfers to states have not materially strained the Centre's finances, even during periods of higher devolution

Most states have reduced their market borrowings, and raised less-than-projected amounts via state government securities, pushing up yields for short-term papers that the Centre typically uses

Panel's recommendations sent to PM and finance minister; report to be tabled in Parliament

Chairman of the 16th Finance Commission Arvind Panagariya on Monday submitted to President Droupadi Murmu the panel's report, which will provide the formula for devolution of taxes between the Centre and states. The commission, which was mandated to submit its report by October 31, was given an extension of one month till November 30. "Members of the 16th Finance Commission, led by its Chairman, Dr Arvind Panagariya, called on President Droupadi Murmu and submitted the Commission's report for 2026-31," Rashtrapati Bhavan said in a post on X. As per the terms of reference, the 16th Finance Commission is mandated to determine the formula for states' share of central taxes and the grants-in-aid for five years beginning 2026-27. The commission has visited all states and Union Territories as a precursor to firming up its views on states' share in grants in aid and taxes. The commission has four members-- Retired bureaucrat Annie George Mathew and economist Manoj Panda are full-time ..

The government has extended the tenure of the 16th Finance Commission by one month till November 30. The 16th Finance Commission was constituted by the government on December 31, 2023, with former Niti Aayog vice-chairman Arvind Panagariya as its Chairman. The report by the panel was due by October 31. The Commission will mainly make recommendations on the distribution of taxes between the Centre and states for a 5-year period starting April 1, 2026. The Finance Ministry, in a notification dated October 10, said that the date for submission of the 16th Finance Commission report is being extended till November 30. The Commission has four members and is assisted by Secretary Ritvik Pandey, two joint secretaries and one economic advisor. Retired bureaucrat Annie George Mathew and economist Manoj Panda are full-time members of the Commission, while SBI Group Chief Economic Advisor Soumya Kanti Ghosh and RBI Deputy Governor T Rabi Sankar are part-time members. Besides suggesting tax .

Its current horizontal devolution formula is insufficient to prepare cities to deal with floods and droughts caused by climate change

Payout with sizeable arrears will hit core inflation harder, as it propels demand for goods and services overtime, and leads to an instantaneous reset of housing rents

Former RBI Governor Raghuram Rajan noted that the previous finance commissions devolved more funds to the local bodies and urged for greater decentralisation in India