Government appoints Ajay Narayan Jha, Annie Mathew as 16th Finance Commission members

The 16th Finance Commission will make its recommendations by October 31, 2025 for the five year period commencing April 1, 2026.

The government has appointed former expenditure secretary Ajay Narayan Jha, former special secretary Annie George Mathew, and Artha Global Executive Director Niranjan Rajadhyaksha as the three full-time members of the 16th Finance Commission, which will recommend how taxes are shared between the Centre and states and also among states.

The 16th Finance Commission constituted on December 31 2023 is chaired by Arvind Panagariya, who was the former NITI Aayog Vice-Chairman.

State Bank of India Group Chief Economic Advisor Soumya Kanti Ghosh has been appointed as the part-time member of the Commission.

All the members have been appointed to the Commission with the approval of the President of India.

The 16th Finance Commission will make its recommendations by October 31, 2025, for the five-year period commencing April 1, 2026. The finance commission normally takes about two years to make its recommendations. Ritvik Ranjanam Pandey is the Secretary to the commission.

The Cabinet had on November 29 approved the terms of reference for the 16th Finance Commission. These include the distribution of the net proceeds of taxes between the Centre and the states and the allocation between the states of the respective shares of such proceeds, the principles, grants-in-aid and the revenues of the states and measures needed to supplement the resources of the panchayats. The Commission may review the present arrangements on financing Disaster Management initiatives, concerning the funds constituted under the Disaster Management Act, 2005 (53 of 2005), and make appropriate recommendations thereon.

The 16th Finance Commission's Chairman Panagariya, is a professor of Indian political economy at Columbia University, New York. He is also the former chief economist of the Asian Development Bank and has worked with the World Bank, International Monetary Fund and United Nations Conference on Trade and Development in various capacities.

Article 280(1) of the Constitution lays down the modalities for setting up a Finance Commission. The Constitution says that the finance commission has to be constituted every fifth year or earlier.

The 15th Finance Commission, chaired by NK Singh, was set up on November 27, 2017, and made recommendations for a period of six years from April 1, 2020. Its recommendations remain valid till the financial year 2025-26.