16th Finance Commission Devolution Deliberations & GST Council

The 16th Finance Commission, chaired by Dr. Arvind Panagariya, initiated consultations with State governments on horizontal tax devolution criteria and disaster management financing under Article 280 of the Constitution.

• Article 280 mandates the President to constitute a Finance Commission every 5 years consisting of a Chairman and 4 members.
• Recommendations cover: Distribution of net tax proceeds between Union and States (vertical), allocation among States (horizontal), and grants-in-aid under Article 275.
• GST Council under Article 279A is a joint forum of Centre and States (Union FM is Chairperson; Union MoS Finance and State Finance Ministers are members). Voting: Centre has 1/3 weight, States have 2/3 weight; 3/4 majority required for decisions.
• GST compensation cess expiry and rate rationalisation into simplified slabs remain active policy discussions.