Sixteenth Finance Commission Seeks Public Input on Terms of Reference


The Sixteenth Finance Commission (XVIFC) has opened its doors to suggestions and viewpoints from the general public, institutions, and organizations concerning matters within its terms of reference.

GS-02 (Polity)

Key details:

  • Constituted in accordance with the Constitution of India by the President, the Sixteenth Finance Commission, led by Chairman Dr. Arvind Panagariya, commenced its tenure on December 31, 2023. The Commission’s mandate spans over a five-year period starting from April 1, 2026, focusing on several key areas:
  • Distribution of Tax Proceeds: Deliberations will revolve around the equitable distribution of net tax proceeds between the Union and the States, as outlined in Chapter I, Part XII of the Constitution. Additionally, the Commission will assess the allocation of these proceeds among the States.
  • Principles Governing Grants-in-Aid: The Commission will formulate principles guiding grants-in-aid from the Consolidated Fund of India to the States. This includes determining the sums to be disbursed to the States under Article 275 of the Constitution for purposes beyond those specified in the provisos to clause (1) of the article.
  • Augmenting State Consolidated Funds: Recommendations will be made on measures to bolster the Consolidated Fund of a State, with the aim of enhancing resources available to Panchayats and Municipalities within the State. These recommendations will be based on inputs from the respective State Finance Commissions.
  • Financing Disaster Management Initiatives: The Commission is tasked with reviewing the current financing mechanisms for Disaster Management initiatives, ensuring adequacy and effectiveness in addressing disaster-related challenges.
  • In its quest to fulfill these responsibilities, the XVIFC recognizes the importance of incorporating diverse perspectives and insights from stakeholders across the spectrum. As such, it invites contributions from the public, institutions, and organizations to inform its deliberations and recommendations on these crucial matters.
  • Interested parties are encouraged to submit their suggestions and views to the Sixteenth Finance Commission, facilitating a collaborative approach towards achieving equitable and sustainable fiscal arrangements for the nation.