Govt begins process of constituting Sixteenth Finance Commission

On Monday, the government announced the appointment of Ritvik Ranjanam Pandey, a 1998-batch IAS officer of the Karnataka cadre serving as Joint Secretary, Department of Revenue, Ministry of Finance, as Officer on Special Duty for Advance Cell of 16th Finance Commission in the rank and pay of Additional Secretary. Earlier in 2009-10, as Deputy Secretary, he had also been part of the Thirteenth Finance Commission.

The Sixteenth Finance Commission will cover the five-year period beginning 2026-27, the report for which is expected to be taken up by the government at the time of presentation of Budget 2026-27.

The Finance Commission is constituted by the President under article 280 of the Constitution, mainly to give its recommendations on distribution of tax revenues between the Union and the States and amongst the states themselves. The Commission’s work involves redressing the vertical imbalances between the taxation powers and expenditure responsibilities of the Centre and the States respectively and equalisation of all public services across the states.

The 15th Finance Commission, chaired by NK Singh, had submitted two reports. The first report, consisting of recommendations for the financial year 2020-21, was tabled in Parliament in February 2020. The final report with recommendations for the 2021-26 period was tabled in Parliament on February 1, 2021.

The share of states in the central taxes for the 2021-26 period was recommended to be 41 per cent same as that for 2020-21. This was less than the 42 per cent share recommended by the 14th Finance Commission for 2015-20 period, with the 1 per cent adjusted to factor in the new union territories of Jammu and Kashmir, and Ladakh.