Government appoints four members to newly-constituted 16th Finance Commission

The government has appointed former expenditure secretary Ajay Narayan Jha and SBI Group Chief Economic Advisor Soumya Kanti Ghosh, along with two other members, to the newly-formed 16th Finance Commission. Arvind Panagariya, former vice chairman of Niti Aayog, is appointed as the chairman. The commission will have four members, assisted by Secretary Ritvik Ranjanam Pandey, two joint secretaries, and one economic advisor.

Among the appointed members, Ajay Narayan Jha, who also served in the 15th Finance Commission; retired bureaucrat Annie George Mathew; and Artha Global Executive Director Niranjan Rajadhyaksha will serve as full-time members. Soumya Kanti Ghosh will be a part-time member, as per the finance ministry's notification. The chairman and members will hold office until the submission of the report or October 31, 2025, whichever is earlier.

The 16th Finance Commission was constituted on December 31, 2023, under the leadership of Arvind Panagariya, and is expected to submit its report to the President by October 31, 2025. The report will cover a five-year period starting on April 1, 2026.

The commission's responsibilities include recommending tax distribution between the central and state governments, proposing revenue augmentation measures, and reviewing the current financing arrangements for disaster management initiatives under the Disaster Management Act, 2005.

The Finance Commission, a constitutional body, provides suggestions on financial relations between the central and state governments. The previous 15th Finance Commission, led by 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, aligning with the recommendation of the 14th Finance Commission under Y V Reddy.

(With PTI inputs)