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Updated January 31st, 2024 at 13:12 IST

Government appoints 4 members of the 16th Finance Commission

The commission is entrusted with the crucial responsibility of formulating the revenue-sharing formula.

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finance commission
Government appoints 4 members of the 16th Finance Commission | Image:PTI
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Finance commission constituted: The government has finalised the composition of the Sixteenth Finance Commission (SFC), appointing four key members, three of whom will serve in a full-time capacity. 

AN Jha, former expenditure secretary and member of the 15th Finance Commission; Annie George Mathew, former special secretary of the department of expenditure; and Niranjan Rajadhyaksha, executive director of Artha Global, have been appointed as full-time members, bringing a wealth of experience to the SFC. Additionally, Soumya Kanti Ghosh, the group chief economic advisor at the State Bank of India, joins the commission in a part-time capacity.

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The government had earlier designated Arvind Panagariya, former vice chairperson of NITI Aayog, as the chairperson of the SFC in December. The commission, entrusted with the crucial responsibility of formulating the revenue-sharing formula between the Centre and states for the fiscal years 2027-2032, is now fully constituted.

The official notification, approved by President Droupadi Murmu on Tuesday, stipulates that the chairman and other members will hold office until the submission of the report or October 31, 2025, whichever is earlier.

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The SFC's primary mandate is to delineate the distribution of the Centre’s tax revenue among states for the upcoming five-year period, commencing in fiscal year 2027. Additionally, it is tasked with ensuring that states implement efficient financial systems for local bodies in accordance with guidance from state finance commissions. The SFC will propose measures to enhance the consolidated funds for panchayats and municipalities and critically review both national and state disaster management funds.

Notably, the government has maintained concise 'terms of reference' for the commission, affording the SFC flexibility to make recommendations within constitutional limits regarding the sharing of tax revenue.

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(with PTI inputs)

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Published January 31st, 2024 at 13:12 IST

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