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 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.