Arvind Panagariya Appointed Head Of Sixteenth Finance Commission By Government

Arvind Panagariya Appointed Head Of Sixteenth Finance Commission By Government

  02 Jan 2024

 

In a significant development, the government has appointed Arvind Panagariya, former Niti Aayog vice chairman and Columbia University professor, as the chairman of the Sixteenth Finance Commission. The Commission is entrusted with the crucial task of recommending the tax revenue sharing formula between the Centre and the States for the upcoming five-year period starting from April 2026.

Appointment and Notification

The Finance Ministry officially notified the appointment of Arvind Panagariya as the chief of this Constitutional body. The order, signed by President Draupadi Murmu, solidifies Panagariya’s position as the head of the Commission, whose terms of reference were previously approved by the Cabinet on November 29.

Notable Background

Arvind Panagariya, a distinguished trade economist, had previously served as the first vice chairman of the Niti Aayog from 2015 to 2017. The Niti Aayog, established to replace the Planning Commission, plays a pivotal role in formulating economic policies and strategies for the Indian government.

Composition of the Commission

While the names of the other members of the Sixteenth Finance Commission will be notified separately, the order also designated Ritvik Ranjanam Pandey, former joint secretary in the Department of Revenue, as the panel’s secretary. The tenure for both the Chairman and other members is specified to last until the submission of the Commission’s report or October 31, 2025, whichever comes earlier.

Deadline and Historical Context

The Commission is expected to submit its recommendations by October 2025, providing ample time for the proposed tax revenue sharing formula to be incorporated into the Budget exercise for the fiscal year 2026-27. It is noteworthy that the Fifteenth Finance Commission, chaired by NK Singh, was constituted in November 2017, with its terms of reference being modified later to extend its tenure to six years in 2019.

Terms of Reference

Apart from formulating recommendations on the tax sharing formula between the Centre and the States, the Sixteenth Finance Commission has been assigned the crucial responsibility of reviewing the current financing arrangements for Disaster Management initiatives. Furthermore, the Commission is tasked with proposing measures to augment States’ consolidated funds to supplement the resources available with Panchayats and Municipalities.

Important Questions Related to Exams

Q1. Who has been appointed as the Chairman of the Sixteenth Finance Commission?
A) NK Singh
B) Arvind Panagariya
C) Ritvik Ranjanam Pandey

Q2. What is the deadline set for the Sixteenth Finance Commission to submit its recommendations?
A) April 2026
B) November 29
C) October 31, 2025

Q3. Which Constitutional body was replaced by the Niti Aayog?
A) Finance Commission
B) Planning Commission
C) Reserve Bank of India

Q4. In which year was the Fifteenth Finance Commission constituted, and who chaired it?
A) 2015, Arvind Panagariya
B) 2017, NK Singh
C) 2019, Ritvik Ranjanam Pandey

Please provide your answers in the comments section

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