16th-finance-commission-holds-inaugural-meeting-under-chairman-arvind-panagariya

The 16th Finance Commission convened its first meeting under the leadership of Chairman Arvind Panagariya. Held on Wednesday, the meeting delved into crucial discussions concerning the Terms of Reference (ToR) for the panel, setting the stage for extensive consultations with a broad spectrum of stakeholders.

 

The commission, through a statement released by the finance ministry, expressed its commitment to engage with diverse entities, ranging from State Governments and Local Bodies to various Ministries of the Government of India, alongside domain experts.

 

Emphasizing the importance of thorough analytical work, the commission articulated its intention to harness the expertise of leading research organizations, think tanks, and entities specializing in fiscal federal relations.

 

The ToR, approved by the cabinet, comprises pivotal aspects such as the equitable distribution of net tax proceeds between the Union and states, the allocation of respective shares among states, and the guiding principles governing grants-in-aid from the Consolidated Fund of India to states.

 

Further, the commission has been tasked with proposing measures aimed at fortifying State Consolidated Funds while augmenting resources for panchayats and municipalities.

 

Formally notified by the finance ministry on December 31, the Terms of Reference set a comprehensive framework for the commission's mandate.

 

It is anticipated that the commission will present its recommendations by October 31, 2025, covering a five-year award period starting April 1, 2026.

 

It comprises full-time members such as former expenditure secretary Ajay Narayan Jha, retired bureaucrat Annie George Mathew, and Artha Global executive director Niranjan Rajadhyaksha, alongside part-time member Soumya Kanti Ghosh, Chief Economic Advisor of the SBI Group.

 

In parallel, the forthcoming 28th meeting of the Financial Stability and Development Council is scheduled for February 21.

 

 Presided over by Finance Minister Nirmala Sitharaman, the meeting will convene key financial sector regulators, including RBI Governor Shaktikanta Das, stressing upon the government's concerted efforts towards fostering financial stability and development.