Government appoints members of the Sixteenth Finance Commission
Attribution-Fifteenth Finance Commission, Government of India, GODL-India , via Wikimedia Commons

In pursuance to Article 280(1) of constitution, the Sixteenth Finance Commission was constituted on 31.12.2023 by the government. Shri Arvind Panagariya, former Vice-Chairperson, NITI Aayog and a noted economist is appointed as its Chairperson.

Article 280 was adopted by the government of India on 10th August 1949 after two day debate in the parliament. The clause (1) of Article 280, empowered President to constitute the Finance Commission every five years consisting of a Chairperson and four other members. Parliament would determine the qualifications of the Commission’s members and procedures. Article 280 (3) laid down the terms of reference for the commission. In 1992, an amendment to the Article 280 expanded scope of work of the Finance Commission to include recommendations on increasing funds in the Consolidated Fund of a state to supplement the resources of the Panchayats and Municipalities.   


The 16th Finance Commission has been requested to make recommendations as to the following matters, namely:

  • The distribution between the Union and the States of the net proceeds of taxes which are to be, or may be, divided between them under Chapter I, Part XII of the Constitution and the allocation between the States of the respective shares of such proceeds;
  • The principles which should govern the grants-in-aid of the revenues of the States out of the Consolidated Fund of India and the sums to be paid to the States by way of grants-in-aid of their revenues under article 275 of the Constitution for the purposes other than those specified in the provisos to clause (1) of that article; and
  • The measures needed to augment the Consolidated Fund of a State to supplement the resources of the Panchayats and Municipalities in the State on the basis of the recommendations made by the Finance Commission of the State.

With the approval of the President of India, three full time members are appointed for the 16th Finance Commission- Shri. Ajay Narayan Jha, former member, 15th Finance Commission and former Secretary, Expenditure; Smt. Annie George Mathew, former Special Secretary, Expenditure; Dr. Niranjan Rajadhyaksha, Executive Director, Artha Global; and Dr. Soumya Kanti Ghosh, Group Chief Economic Advisor, State Bank of India as part-time member.

The Sixteenth Finance Commission has been requested to make its recommendations available by October 31, 2025, covering an award period of 5 years commencing April 1, 2026.

The Fifteenth Finance Commission cover six-year period from April 1, 2020 till March 31, 2026. In wake of COVID-19 pandemic, 15th Finance Commission recommendations included a package for the upgradation of primary health care through panchayats and municipalities.




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