Finance Minister Sitharaman Tables 16th Finance Commission Report in Lok Sabha
Report outlines Centre-state tax devolution for 2026–2031, excluding cesses and surcharges
New Delhi, Feb 1: Finance Minister Nirmala Sitharaman on Sunday presented the 16th Finance Commission report in the Lok Sabha, detailing the recommended formula for tax revenue sharing between the Centre and states for the period 2026–2031.
The Finance Commission, a constitutional body, is tasked with advising on fiscal relations between the central and state governments. Its recommendations cover the divisible pool of taxes, while cesses and surcharges levied by the Centre remain outside this pool.
The 16th Finance Commission was constituted on December 31, 2023, under the chairmanship of former Niti Aayog Vice Chairman Arvind Panagariya. The panel included retired bureaucrat Annie George Mathew, economist Manoj Panda, SBI Group Chief Economic Advisor Soumya Kanti Ghosh, RBI Deputy Governor T. Rabi Sankar, and Secretary to the Commission Ritvik Pandey.
The Commission submitted its report to President Droupadi Murmu on November 17, 2025, which now serves as a blueprint for Centre-state fiscal devolution for the next five years.
