Latest Updates on 16th Finance Commission

More than three weeks after the 16th FC's recommendations became public, the southern states are no longer complaining about an unfair deal in the way central taxes are distributed among them

A significant design change is the increase in untied funds. The untied component across these four grants is about 52 per cent compared with only 21 per cent under the 15th FC

An ISB evaluation submitted to the 16th Finance Commission flags rising debt, subsidy pressures and weak revenues in Punjab, warning that the debt-to-GSDP ratio could cross 60 per cent by 2030-31

Karnataka's move to include PSU and SPV debt in state liabilities offers a template to curb off-budget borrowings and improve fiscal transparency, a World Bank report says

A World Bank report to the 16th Finance Commission says state fiscal rules improved headline deficits, but debt levels remain high and uneven across several large states

An expert report to the 16th Finance Commission suggests inflation-linked power tariff hikes could ensure timely revenue recovery for discoms and help consumers avoid sharp increases

Economists warn that removal of revenue deficit grants could hurt fiscally weak and hill states, forcing them to seek alternative support from the Centre

After a decade of losses, the state discoms reported profits of about ₹2,700 crore in 2024-25, a turnaround from the losses of over ₹25,000 crore the previous year

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