Synopsis
On January 20, Arvind Panagariya, chairman of the 16th Financial Commission of India, stated that the previous commission allocated 41% of the divisible pool to states and 59% to the Centre. The Commission is currently visiting Sikkim to assess financial distribution criteria.Key Takeaways
- 41 percent of the divisible pool goes to states.
- 59 percent is allocated to the Centre.
- Consultations with stakeholders are ongoing.
- A report will be published in October 2025.
- The commission's work will be effective from 2026 to 2030.
Gangtok, Jan 20 (NationPress) The Chairman of the 16th Financial Commission of India, Arvind Panagariya, announced on Monday that according to the recommendations of the prior commission, 41 percent of the divisible pool was allocated to the states, while 59 percent was assigned to the Centre.
The members of the 16th Finance Commission are currently visiting Sikkim, with Gangtok being their location on Monday.
In a statement to the media in Gangtok, Panagariya remarked, “Following the directives of the 15th Financial Commission, 41 percent of the divisible pool has been designated for the states, whereas 59 percent is for the centre. Factors including each state's proportion of the national population, their share of the total area, and income disparity will influence the distribution of finances from the 41 percent.”
The Financial Commission is present in the state to analyze and define the “divisible pool”, which determines the financial allocations to the states versus the Centre.
During his briefing, the Chairman mentioned that the Commission has been engaging with various states, consulting with stakeholders, past commission chairpersons, experts, and state ministers.
“The insights gathered from these consultations will culminate in a final report set for release in October 2025, which will be presented to the President of India,” Panagariya added, stating that the 16th Financial Commission’s activities will be effective from 2026 to 2030.
The Commission convened with the Chief Minister of Sikkim, state government officials, urban and rural local bodies, stakeholders from trade and industries, and representatives from political parties.
The chairman also detailed the jurisdiction and mandate of the Finance Commission, which encompasses vertical devolution, grants for local governance, disaster relief, defense and security, and fiscal consolidation, among other responsibilities.
