Government Appoints Arvind Panagariya as Chairman of 16th Finance Commission

In a crucial move shaping India's fiscal future, the government announced the appointment of renowned economist Dr. Arvind Panagariya as the Chairman of the 16th Finance Commission on Sunday. The notification also named Joint Secretary in the Finance Ministry, Ritvik Ranjanam Pandey, as the Commission's Secretary.

The President is pleased to constitute a Finance Commission with Dr. Arvind Panagariya, former Vice-Chairman of NITI Aayog and Professor at Columbia University, as the Chairman. Members of the Commission will be notified separately, stated the official release.

The 16th Finance Commission holds immense significance, entrusted with formulating the devolution of tax revenues between the central government and Indian states. Under Panagariya's leadership, the Commission is expected to submit its report by October 31, 2025, outlining the fiscal roadmap for the five-year period starting April 1, 2026.

Economists anticipate the Commission will face a challenging task in balancing the aspirations of developed and less developed states while crafting the devolution framework. A clearer picture may emerge upon the release of the detailed terms of reference, they noted.

Dr. Panagariya, an Indian-born economist with extensive international experience, brings a wealth of expertise to the table. After serving as Chief Economist of the Asian Development Bank and holding key positions at the World Bank, IMF, and UNCTAD, he was handpicked by Prime Minister Narendra Modi in 2017 to head the newly established NITI Aayog. His appointment as Chairman underscores the government's emphasis on economic acumen in navigating delicate fiscal decisions.

The 16th Finance Commission's mandate extends beyond simply determining tax revenue distribution. It is tasked with reviewing the principles governing grants-in-aid to states and recommending measures to bolster state finances, including resources for panchayats and municipalities, as per recommendations from their respective state finance commissions.