New Delhi: Renowned economist Arvind Panagariya has been appointed chairman of the newly constituted 16th Finance Commission, entrusted with the critical task of recommending how federal taxes will be shared between the Indian government and states for the period 2026-31.
This crucial role marks Panagariya’s return to the forefront of national economic policymaking.
The government announced the appointment on Sunday, December 31st, highlighting Panagariya’s extensive experience in economics and public policy.
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As the first Vice Chairman of NITI Aayog and with prior positions at the World Bank, IMF, and UNCTAD, his credentials carry significant weight. His academic background, featuring a PhD in economics from Princeton University, further cements his qualifications for this complex task.
The commission’s five-year mandate underscores the significant impact it will have on India’s financial landscape in the coming years.
Currently, the central government shares 41% of federal taxes with states. The 16th Finance Commission under Panagariya’s leadership will now re-evaluate this formula, potentially influencing aspects like state budgets and development planning.
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The commission’s findings, due by October 31st, 2025, will be closely watched by both the central and state governments.
Beyond the core issue of tax devolution, the commission will also examine revenue augmentation measures and review the current setup for financing disaster management initiatives.