Finance Commission

India’s 16th Finance Commission and the equity-efficiency nexus in federalism  The 16th Finance Commission has finished its report which will shape the flow of resources to states for the next five years. As we await the report, a fiscal economist outlines the tricky terrain of striking a fine balance between equity and incentivising efficiency among states with different capabilities

16th Finance Commission may tie local body grants to further property tax reforms, cleaner air

The commission is unlikely to tinker with the formula for devolution of taxes to states, which will continue to receive 41% of the divisible pool

RBI's T Rabi Sankar joins 16th Finance Commission as part-time member

The appointment is consequent to the resignation of one of the full-time members, former finance secretary Ajay Narayan Jha, on personal grounds.

Majority of states want tax revenue share with Centre hiked to 50%: Finance Commission chairman Arvind Panagariya

At present, states get 41 per cent of the tax revenue while the rest goes to the Centre, the 16th Finance Commission Chairman, Arvind Panagariya, said.

UP's per capita income second lowest, but state finances good: Finance Commission chief

Chairman of the 16th Finance Commission Arvind Panagariya noted that Uttar Pradesh's debt-to-GDP ratio remains at manageable levels, ensuring that interest payments do not eat into the state's developmental expenditure.

Weight of 'Income Distance' criteria may shrink in next Finance Commission's formula

The current finance commission - whose recommendation are valid for 2021-26 – had previously suggested to assign 45% weight to income distance, which resulted in UP and Bihar getting a fairly larger share of taxes as against relatively well-off states like Kerala, Karnataka or Haryana.

States are ultimate beneficiaries of cesses: FM Sitharaman

Nirmala Sitharaman refuted states' allegations on cess utilisation.

Finance Commission’s workings need a greater degree of transparency

India’s federal structure is under stress on several grounds, particularly tax devolution between Centre and states, and among states.  Finance Commissions play a critical role in the devolution process. However, a drawback in their approach has been the absence of an adequate level of transparency on the underlying reasons for significant changes in devolution formulae

How did India's top economic policymakers steer the economy through 2024?

Sanjay Malhotra was appointed as the 26th Governor of the RBI on December 11, after serving as Revenue Secretary from December 2022 to 2024.

ICRA projects mild dip in combined grants to states in FY25

ICRA expects the state GST, excise duty, and tax collections to grow by 11-13 percent in FY25

Finance Commission’s vertical devolution needs to be hiked

Finance Commission resource sharing formulas have led to some states consistently losing out on devolution of resources. This puts stress on the federal spirit. One way to ease the situation is to consider raising the devolution of the divisible pool among states to 50 percent from the current 41 percent

Centre releases Rs 1.78 lakh cr tax devolution to states, including advance instalment for festive season

The Union Government has doubled the release to help states manage their finances more effectively during the festive period.

Finance Commission can create more fiscal space for states through grants

16th Finance Commission is working on a resource sharing formula in the backdrop of a squeeze in the share of unconditional transfer of resources from centre to states. This limit fiscal space of states. One way to give states more flexibility is to enhance FC grants, which comes without strings attached

Bengaluru requires Rs 55,586 crore investment over next five years: Karnataka CM to 16th Finance Commission

Karnataka CM Siddaramaiah says the state suffered losses amounting to Rs 79,770 crore during the 15th Finance Commission period. For every rupee Karnataka contributes, only 15 paise is returned to the state, he said.

Poonam Gupta appointed as convenor of 5-member Advisory Council to 16th Finance Commission

The Advisory Council will help broaden the sixteenth Finance Commission's ambit and understanding by seeking the best national and international practices on matters pertaining to fiscal devolution.

Need a data portal for finance commission, says 16th Finance Commission Chairman Arvind Panagariya

The Sixteenth Finance Commission will have to make its recommendations till October 2025

Finance Ministry invites applications for young professionals on contract basis

The consultants are classified into three categories/grades: Young Professionals, Consultants, and Senior Consultant

Govt appoints Manoj Panda as 16th Finance Comm member

The 16th Finance Commission, chaired by Arvind Panagariya, has four members.

The finance commission should focus on increasing the size of the cake rather than its distribution

In 2011-12 the divisible pool made up 88 per cent of the union government’s tax revenue, but it fell to 77 per cent of the budget for 2024-25

Govt releases triple tax devolution instalment to states in February worth Rs 2.15 lakh crore

The state that received the largest amount was Uttar Pradesh, accounting for Rs 25,495 crore, followed by Bihar at Rs 14,295 crore. The division of funds among states is done on the basis of a variety of factors, including population.

Niranjan Rajadhyaksha quits 16th Finance Commission, govt to appoint new member

The government had announced the membership of the Arvind Panagariya-led 16th Finance Commission on January 31

Panagariya chairs first meeting of 16th Finance Commission

During the meeting, the commission discussed its Terms of Reference, as per the order by the President of India and notified by the Ministry of Finance on December 31, 2023, an official statement said.

FM is honest and correct, the figures speak for themselves, says NK Singh on Centre versus South

The Chairman of the 15th Finance Commission spoke to Moneycontrol on a range of issues from India’s fiscal commitments to the one nation, one election proposal

India's fiscally conservative budget should lead to rating upgrade, says NK Singh

The former bureaucrat flagged concerns about the methodologies used by credit rating companies since they don’t apply common standards for all countries.

Centre "fully honoured" 41% tax share formula, says 15th Fin Comm head NK Singh

On claims by certain states that their share in the tax pie is reducing due to Centre's increasing reliance on cess and surcharges, Singh said that one must be cognizant of the enhanced spending obligations of the central government given new and emerging geopolitical and security challenges.