1st January 2024 (10 Topics)
Arvind Panagariya Appointed Chairman of 16th Finance Commission
Context
Arvind Panagariya, the former Chairman of NITI Aayog, has recently been named as the head of the 16th Finance Commission.
Background
- Arvind Panagariya served as the Chairman of NITI Aayog, a premier policy institution, contributing to the Indian government's policymaking process.
- His diverse experience and expertise in economic matters make him a prominent figure for the role of heading the Finance Commission.
- This significant appointment follows his departure from the think tank in August 2017 after a notable two-year tenure.
Finance Commission in India:
The Finance Commission is a constitutional body in India that plays a crucial role in fiscal federalism. Here are a few key pointers about the Finance Commission:
- Constitutional Mandate:
- The Finance Commission is constituted under Article 280 of the Indian Constitution.
- It is formed every five years or at such intervals as deemed necessary by the President.
- Objective:
- The primary objective of the Finance Commission is to address the distribution of financial resources between the Centre and the States.
- Functions:
- The Commission recommends the distribution of net proceeds of taxes between the Centre and the States.
- It suggests principles governing the grants-in-aid to be given to the States out of the Consolidated Fund of India.
- The Commission also evaluates the impact of the Centre's debt on the fiscal autonomy of States.
- Composition:
- The Finance Commission comprises a Chairman and four other members.
- Members are appointed by the President, and they bring diverse expertise, including economics, finance, and public administration.
Panagariya's Vision for India:
- Earlier this year, Arvind Panagariya expressed optimism about India's economic trajectory.
- He envisioned India becoming the world's third-largest economy by 2026.
- According to his projections, India's GDP could reach $5 trillion in 2026 and $5.5 trillion in 2027, indicating a significant growth trajectory.
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