In its first meeting after its constitution, the sixteenth finance commission headed by Arvind Panagariya on Wednesday discussed the terms of reference (ToR) and plans for wide-ranging consultations with various stakeholders, including states, local bodies, central government ministries and experts.
The commission will come out with its recommendations by October 31, 2025, on the central tax devolution formula and grants-in-aid to states for five years commencing April 1, 2026.
“The XVI-FC recognised that it will be carrying out detailed analytical work and would require to rope in all the expertise that it can garner, including that from leading research organisations, leading think tanks and other organisations working in the area of fiscal federal relations,” according to an official statement.
The chairman and other members would hold office from the date on which they respectively assume office up to the date of submission of the report or October 31, 2025, whichever is earlier.
The ToR for the Sixteenth Finance Commission has been kept shorter than the previous Commissions as desired by states. This has been done to give the commission much more leeway to take into account all the inputs from experts who appear before the commission, to fashion an award that is within the constitutional frame.