The Centre appointed former Vice Chairman of NITI Ayog, Arvind Panagariya as the head of the 16th Finance Commission on Sunday. A renowned economist, Panagariya served as the NITI Ayog Chairman from January 2015 to August 2017 and currently teaches economics at Columbia University.
Panagariya had announced his surprise exit from the NITI Aayog after a stint of two years in August 2017.
The top economist has been known to hailed the Modi government's major reforms and also asserting that labour reforms and less protectionism are needed for the country to achieve its potential growth.
Joint Secretary in the finance ministry Ritvik Ranjanam Pandey will be the secretary to the commission, the government said in a notification.
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"The President is pleased to constitute a Finance Commission with Dr Arvind Panagariya, former Vice-Chairman, NITI Aayog and Professor, Columbia University, as the Chairman. Members of the Commission will be notified separately," it said.
As per the notification, the commission will submit its report for the five-year period starting from 2026-27 to 2030-31 to the President by October 31, 2025.
The Terms of Reference (ToR) of the 16th Finance Commission was approved by the Union Cabinet, chaired by Prime Minister Narendra Modi last month.
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The commission will suggest tax devolution between the Centre and states and revenue augmentation measures and will also review the present arrangements for financing disaster management initiatives with reference to the funds constituted under the Disaster Management Act, 2005.
The Finance Commission is a constitutional body that gives suggestions on centre-state financial relations.
The previous 15th Finance Commission under the leadership of NK Singh made recommendations that states be given 41 per cent of the divisible tax pool of the Centre during the five-year period 2021 22 to 2025 26, which is at the same level as was recommended by the 14th Finance Commission.