Syllabus: GS-II
Subject: Indian Polity and Constitution
Topic: Appointment to various Constitutional Posts, Powers, Functions and Responsibilities of various Constitutional Bodies.
Context: The Finance Ministry on Sunday notified President Droupadi Murmu’s order for Mr. Panagariya’s appointment as the chairman of 16th Finance Commission.
Synopsis:
- The commission will recommend the tax revenue sharing formula between the Centre and States for the five year period beginning April 2026.
- Panagariya, had served as the first Vice Chairman of the NITI Aayog, which replaced the Planning Commission, from 2015 to 2017.
- The names of the members of the commission will be notified separately, says the order.
- Term: Upto the date of the submission of report or October 31, 2025, whichever is earlier.
| Article 280:·      Mandates the president to constitute a finance commission every five years.
·      Composition: Chairman and four other members. ·      Includes the duty of the commission to recommend to the president. ·      Empowers Parliament to decide the qualifications of members to be appointed. In consonance Finance Commission 1952 Act     was passed. |
Conclusion: The recommendations of Finance Commission are not binding in nature and It is up to the Union government to implement its recommendations on granting money to the states.
