New Members Join 16th Finance Commission

In a significant development, the Indian Government has appointed key members to the newly-constituted 16th Finance Commission, tasked with critical responsibilities related to centre-state financial relations and fiscal recommendations. The Commission, chaired by former Vice Chairman of Niti Aayog Arvind Panagariya, will play a pivotal role in shaping financial policies for the upcoming years.

The notable appointments include former Expenditure Secretary Ajay Narayan Jha, SBI Group Chief Economic Advisor Soumya Kanti Ghosh, retired bureaucrat Annie George Mathew, and Artha Global Executive Director Niranjan Rajadhyaksha. Ajay Narayan Jha, having previously served as a member in the 15th Finance Commission, brings valuable experience to the newly-formed commission.

Soumya Kanti Ghosh has been designated as a part-time member, while the other three appointees—Ajay Narayan Jha, Annie George Mathew, and Niranjan Rajadhyaksha—will serve as full-time members. The Commission will be supported by Secretary Ritvik Ranjanam Pandey, two Joint Secretaries, and one Economic Advisor.

The Chairman and other members of the 16th Finance Commission will hold office from their respective assumption dates until the submission of the report or October 31, 2025, whichever is earlier. The Commission’s primary task is to submit a comprehensive report to the President by October 31, 2025, covering the five-year period beginning April 1, 2026.

The Commission’s mandate includes suggesting tax devolution between the Center and States, recommending revenue augmentation measures, and reviewing the current financing arrangements for disaster management initiatives under the Disaster Management Act, 2005. As a constitutional body, the Finance Commission plays a crucial role in providing recommendations on financial relations between the central and state governments.

The erstwhile 15th Finance Commission, under NK Singh, had recommended a 41 percent share of the divisible tax pool for States during the five-year period from 2021-22 to 2025-26. This aligns with the recommendations of the 14th Finance Commission under Y.V. Reddy, emphasizing the continuity and stability of fiscal policies.

The constitution of the 16th Finance Commission marks a significant step in addressing India’s evolving economic landscape, with the appointed members expected to contribute expertise and insights in formulating key financial strategies.

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