Renowned economist Arvind Panagariya, the former vice chairman of NITI Aayog, has been selected to lead the 16th Finance Commission. This commission, established by the President of India, is entrusted with the crucial task of deliberating the fair distribution of taxes between the central government and the states.
The foundation of the Finance Commission rests upon Article 280 of the Indian Constitution. The recently formed 16th Finance Commission holds the responsibility of recommending strategies to enhance resource allocation from states to local bodies. These directives were outlined in the terms of reference mandated by the Government of India on November 29, 2023.
Anticipated to produce its report by October 31, 2025, the new commission aims to present a comprehensive five-year outlook, commencing from April 1, 2026.
Who is Arvind Panagariya? Arvind Panagariya, an esteemed economist, currently occupies the Jagdish Bhagwati chair at Columbia University, specializing in Indian political economy. His extensive work encompasses research in international trade policies, economic development, and reforms centered around the Indian economy.
Previously, Panagariya held pivotal roles such as the first vice chairman of NITI Aayog, a think tank initiated by Prime Minister Narendra Modi, which replaced the Planning Commission. He also served as India’s G20 sherpa until August 2017.
The Role of the Finance Commission: Tasked with formulating a comprehensive taxation devolution plan between the Centre and the states, the Finance Commission operates under the provisions of Article 280(1) of the Indian Constitution.
Ritvik Ranjanam Pandey, currently a joint secretary in the Department of revenue under the finance ministry, has been appointed as the secretary to the commission.
The Finance Commission comprises a chairman and four members. Notably, the 15th Finance Commission was led by former MP N K Singh.
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