On 17 November 2025, the Sixteenth Finance Commission (XVIFC), led by Dr. Arvind Panagariya, delivered its eagerly awaited report to the President of India. This comprehensive document is set to guide the nation's fiscal strategies for the five-year span from 1 April 2026 to 31 March 2031. The report is crucial for establishing the framework for tax revenue distribution between the Union and State governments, thereby marking a significant milestone in India's fiscal federalism.
The Finance Commission, constituted under Article 280 of the Indian Constitution, serves as a constitutional entity. Its primary responsibilities include recommending the division of net tax proceeds between the central government and the states, and among the states themselves. The Commission also advises on grants-in-aid, disaster management funding arrangements, and any other matters referred by the President in the Terms of Reference (ToR).
Dr. Arvind Panagariya, a distinguished economist and former Vice-Chairman of NITI Aayog, chaired the Sixteenth Finance Commission. The Commission's key members included Smt. Annie George Mathew, Dr. Manoj Panda, Shri T. Rabi Sankar, Dr. Soumyakanti Ghosh, and Shri Ritvik Pandey, who served as the Secretary to the Commission. After submitting the report to the President, copies were also provided to the Prime Minister and Union Finance Minister.
The XVIFC undertook an extensive consultation process to formulate its report. This involved meetings with Union and State Governments, discussions with local bodies at various levels, engagements with previous Finance Commission members, inputs from academic institutions, and deliberations with multilateral organizations and domain experts. Such an inclusive approach ensured that the report reflects a wide array of fiscal needs and capabilities.
The final report consists of two volumes:
The report will be made public once presented in Parliament by the Union Finance Minister, as mandated by Article 281 of the Constitution.
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