The Sixteenth Finance Commission, chaired by Arvind Panagariya, submitted its 2026–31 report to the President after wide consultations. Formed under Article 280, it reviews Union and State finances, recommends devolution, grants, and disaster funding. It will be in public, once presented in the Parliament under Article 281.
Click to View MoreFiscal federalism in India is strained by shrinking state autonomy, centralization of revenues under GST, and rising cesses that narrow the divisible pool. To restore balance, the 16th Finance Commission must expand untied transfers, streamline CSS, and rebuild fiscal trust for equitable regional development.
Click to View MoreFiscal relations in India define how financial powers, taxation rights, and expenditure responsibilities are shared between the Centre and the States. The introduction of GST has centralised major taxation powers, reducing States’ fiscal autonomy and increasing their dependence on Central transfers, which account for about 44% of their total revenues. Rising cesses and surcharges outside the divisible pool further limit States’ resources. To strengthen cooperative fiscal federalism, India needs reforms such as expanding States’ tax share, including cesses in the divisible pool, rationalising centrally sponsored schemes, and empowering local governments for better fiscal balance and accountability.
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