The 16th Finance Commission invited suggestions from the general public, institutions and organisations on relevant issues for it and those related to its terms of reference.
About Finance Commission
Under Article 280 of the Constitution, the President of India is required to constitute a Finance Commission at an interval of five years or earlier.
Members: It has a chairman and four members appointed by the President.
Function: It determines the method and formula for distributing the tax proceeds between the Centre and states, and among the states as per the constitutional arrangement and present requirements.
Significance: The recommendations of the Finance Commission are important in determining the fiscal relations between the central and state governments.
The idea is to ensure a fair and equitable distribution of financial resources.
16th Finance Commission
The advance cell for the 16th Finance Commission was established in 2022.
Arvind Panagariya is appointed as the Chairman of the Sixteenth Finance Commission.
It shall make recommendations as to the following matters:
The distribution between the Union and the States of the net proceeds of taxes and the allocation between the States of the respective shares of such proceeds;
The principles which should govern the grants-in-aid of the revenues of the States out of the Consolidated Fund of India.
The measures needed to augment the Consolidated Fund of a State to supplement the resources of the Panchayats and Municipalities in the State are based on the recommendations made by the Finance Commission of the State.
