Sixteenth Finance Commission Submits Report (2026–2031), Text Not to be Released before Feb 2026 Budget

Commission Details

· Constituted by: President of India under Article 280 of the Constitution.

· Chairman: Dr. Arvind Panagariya.

· Members: Smt. Annie George Mathew, Dr. Manoj Panda, T. Rabi Sankar, Dr. Soumyakanti Ghosh.

· Secretary: Ritvik Pandey.

· Report submitted to the President, and copies presented to the Prime Minister and Union Finance Minister.

Mandate (Terms of Reference)

· Cover five years (2026–27 to 2030–31).

· Recommend:

o Distribution of net tax proceeds between Union and States.

o Allocation of States’ respective shares.

o Grants-in-aid to States.

o Financing arrangements for Disaster Management initiatives.

Process

· Detailed analysis of Union and State finances.

· Consultations with:

o Union & State Governments, Local Governments.

o Previous Finance Commission members.

o Academic institutions, multilateral bodies, Advisory Council, domain experts.

Report Structure

· Volume I: Recommendations as per ToR.

· Volume II: Annexures and supporting details.

Next Steps

· Report will enter the public domain once tabled in Parliament by the Union Finance Minister under Article 281.

Key Takeaway

The Sixteenth Finance Commission has delivered its comprehensive report for 2026–2031, outlining tax distribution, grants, and disaster financing, after extensive consultations. Its recommendations will shape fiscal relations between the Union and States once tabled in Parliament.

[ABS News Service/18.11.2025]

The Sixteenth Finance Commission (XVIFC) was constituted by the Hon’ble President of India in pursuance of clause (1) of article 280 of the Constitution. The XVIFC, headed by Chairman Dr. Arvind Panagariya, submitted its Report on 17 November, 2025 to the Hon’ble President of India. Members of the XVIFC, Smt. Annie George Mathew, Dr. Manoj Panda, T. Rabi Sankar and Dr. Soumyakanti Ghosh and the Secretary to the XVIFC Ritvik Pandey accompanied the Chairman. Thereafter, the XVIFC also presented a copy of the report to the Prime Minister and to the Union Finance Minister.

As per the terms of reference (ToR), the XVIFC was mandated to give its report covering a period of five years commencing on the 1st day of April, 2026 making recommendations on the distribution of the net proceeds of taxes between the Union and the States as well as the allocation between the States of the respective shares of such proceeds, grants-in-aid to States, review arrangements on financing Disaster Management initiatives, etc.

Accordingly, during its tenure, the XVIFC analysed the finances of the Union and States in detail and has come up with a report after wide-ranging consultations with the Union Government, State Governments, Local Governments at different tiers, Chairpersons and Members of previous Finance Commissions, academic institutions of eminence, multi-lateral institutions, Advisory Council to the Commission, and other domain experts. This report has been organised in two volumes where Volume I contains the recommendations as per the TOR and the accompanying annexures are in Volume II.

The report shall be available in the public domain once it is tabled in the Parliament by the Union Finance Minister under Article 281.