Former vice chairman of the NITI Aayog Arvind Panagariya has been appointed to head the Finance Commission, the government said through a Gazette Notification dated December 31, 2023.
“In a move aligned with Article 280(1) of the Constitution and the Finance Commission (Miscellaneous Provisions) Act, 1951 (33 of 1951), the President has established a Finance Commission. Dr. Arvind Panagariya, former Vice-Chairman of NITI Aayog and Professor at Columbia University, assumes the role of Chairman, with other Commission members to be notified separately, a Finance Ministry notification said.
Ritvik Ranjanam Pandey has been appointed as the Secretary to the Commission. The tenure for both the Chairman and other members extends from the assumption of office until the submission of the Report or October 31, 2025, whichever comes earlier.
PM Narendra Modi had appointed Panagariya as the first Vice Chairman of the NITI Aayog back in 2015. NITI Aayog, which was announced during the first term of the BJP, replaced the Planning Commission. Panagariya, who was born on September 30, 1952, has been an economics professor at Columbia University in New York. He was previously the top economist at the Asian Development Bank and has also held positions with the World Bank, the International Monetary Fund, and the World Trade Organisation.
Panagariya was coached by trade economist Jagdish Bhagwati and had been the front-runner for the top position at Niti Aayog due to his unwavering support for free-market economics and his alignment with the goals and policies of the Modi administration.
The central government recently approved the terms of reference (ToR) of the 16th Finance Commission, enabling it to make recommendations for five years starting April 1, 2026. The commission would submit its report for the five-year period (2026-27 to 2030-31) to the President by October 31, 2025.
Apart from suggesting the tax devolution between the central & state governments and revenue augmentation measures, the constitutional body would review the present arrangements for financing disaster management initiatives with reference to the funds constituted under the Disaster Management Act, 2005.
It takes around two years to make its recommendations.
