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Government Extends Tenure of 16th Finance Commission (FC) Till November 30, 2025.

National | Dated: 17 Oct 2025

In October 2025, the Government of India (GoI) extended the tenure of the 16th Finance Commission (FC) by one month, moving its report submission deadline from October 31, 2025, to November 30, 2025. The commission will recommend Centre–State tax sharing for the period 2026–31.

🎯 Key Highlights:

  • - The 16th Finance Commission was constituted on December 31, 2023, with Dr. Arvind Panagariya, former Vice Chairman of NITI Aayog (National Institution for Transforming India), serving as the Chairman. The panel is tasked with suggesting financial distribution frameworks between the Centre and States.
  • - The primary objective of the commission is to recommend the distribution of taxes between the Centre and States. Its recommendations will cover the fiscal period from April 1, 2026, to March 31, 2031.
  • - The commission includes members such as Annie George Mathew, Retired Bureaucrat, and Manoj Panda, Economist. It is supported by Secretary Ritvik Ranjanam Pandey, Joint Secretaries Rahul Jain and K.K. Mishra, and Economic Adviser Dr. Prasant K. Panda.

💡 Other Important Facts:

  • (i) Part-time members include Soumya Kanti Ghosh, Chief Economic Advisor, State Bank of India (SBI), and T. Rabi Sankar, Deputy Governor, Reserve Bank of India (RBI). The 16th FC builds on the work of the 15th Finance Commission, chaired by N.K. Singh, which had recommended a 41% share of the divisible tax pool for states.
  • (ii) The 16th FC will recommend on tax distribution, grants-in-aid under Article 275, and local body funding. It will also propose measures to augment the Consolidated Fund of States to support Panchayats and Municipalities.
  • (iii) The Finance Commission, established under Article 280 of the Constitution, is a constitutional body appointed every five years by the President of India to define financial relations between the Union and the States. The first Finance Commission was set up in 1951, and the 16th marks the latest in this series.

📚 Test Your Knowledge:

Who is the Chairman of the recently extended 16th Finance Commission (FC) of India?

Correct Answer: Arvind Panagariya

🚀 Quick Recap: