Finance Commission chairman accorded guard of honour on arrival in Punjab

He was accompanied by distinguished members of the Finance Commission, who were also extended a warm welcome.

Earlier, the 16th Finance Commission constituted an Advisory Council with five members -- DK Srivastava, Neelkanth Mishra, Poonam Gupta, Pranjul Bhandari, and Rahul Bajoria. Poonam Gupta shall be the Convenor of the Advisory Council.

The role and functions of the Advisory Council will be to advise the Commission on any of the Terms of Reference (ToR) or related subjects that may be of relevance. To assist in the preparation of papers or research studies and to monitor or assess studies commissioned by the Finance Commission, thereby enhancing the Commission's understanding of the issues in its ToR.

To help broaden the Commission's ambit and understanding by seeking the best national and international practices on matters pertaining to fiscal devolution and improving the quality, reach, and enforcement of its recommendations. The 16th Finance Commission was constituted by the President on 31st December 2023 with Arvind Panagariya as Chairman.

The commission has been constituted to make recommendations covering a period of five years commencing on April 1, 2026. Additionally, the commission is also mandated to review the present arrangements for financing Disaster Management initiatives, with reference to the funds constituted under the Disaster Management Act, 2005 (53 of 2005), and make appropriate recommendations thereon.

According to the 15th Finance Commission's recommendations, the centre should allocate 41 per cent of tax collection to states. This is known as vertical devolution.

The distribution among states, or horizontal devolution, is based on several criteria like demographic performance, Income, population, area, forest and ecology, tax and measures to check fiscal deficit by individual states. (ANI)