New Delhi: The government on Wednesday announced that the 16th Finance Commission will recommend measures to provide adequate resources to Panchayats and for disaster management besides recommending distribution of tax revenues between the Union and the states.
Announcing the decision, information and broadcasting minister Anurag Singh Thakur said the terms of reference (ToR) for the 16th Finance Commission was approved by the Cabinet on Tuesday late night.
The five-year tenure of the Commission will start from April 1, 2026 and end on March 31, 2031, he said. The government will soon appoint the chairman and members of the commission, he added.
Recently, on November 6, 2023, the government appointed Ritvik Ranjanam Pandey, 1998-batch lAS and Joint Secretary in the Department of Revenue as Officer on Special Duty (OSD) for Advance Cell of 16th Finance Commission in the rank and pay of Additional Secretary.
The 15th Finance Commission (2021-26) was chaired by NK Singh.
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The government may expand the ToR of the 16the Finance Commission later, an official aware of the development said requesting anonymity. “It is not unusual to add additional ToRs before appointing chairman and members of the commission,” he added.
The 15th Finance Commission (FC) also had an expanded ToR as it was asked to recommend performance incentives for states in areas like power sector, adoption of the direct benefit transfer (DBT) of subsidies, and the solid waste management. Besides, its ToRs also included a funding mechanism for the defence and the internal security.
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 among the states themselves. Two distinctive features of the Commission’s work involve redressing the vertical imbalances between the taxation powers and expenditure responsibilities of the centre and the states respectively and equalization of all public services across the states.