The Finance Commission of India is an important constitutional body established under Article 280 of the Constitution. The Commission is constituted by the president every five years, or earlier if deemed necessary, to recommend the distribution of financial resources between the central and state governments.
Key Details:
- Composition: The Finance Commission consists of a chairman and four other members appointed by the president of India.
- Chairman and Members: The 16th Finance Commission was constituted on December 31, 2023, with Shri Arvind Panagariya, former Vice-Chairman, NITI Aayog, as its chairman. The commission includes full-time members such as:
➤ Shri. Ajay Narayan Jha: Former member of the 15th Finance Commission and former Secretary, Expenditure.
➤ Smt. Annie George Mathew: Former Special Secretary, Expenditure.
➤ Dr. Niranjan Rajadhyaksha: Executive Director, Artha Global. Part-time member:
➤ Dr. Soumya Kanti Ghosh: Group Chief Economic Advisor, State Bank of India.
- Functions: The Commission's main functions include reviewing the financial situation of the central and state governments and recommending the distribution of the net proceeds of taxes to be shared between them. It also makes recommendations on the distribution of grants-in-aid to states from the Consolidated Fund of India and on other financial matters.
- Nature of Recommendations: The recommendations made by the Finance Commission are advisory in nature and are not binding on the government. However, they are usually given considerable weight in decision-making processes.
The Finance Commission plays a critical role in addressing financial imbalances between the central and state governments and promoting equitable economic development across different regions of India.
