<p>New Delhi: The 16th Finance Commission, headed by former Vice-Chairman of the <a href="https://www.deccanherald.com/search?q=Niti%20Aayog">Niti Aayog</a> Arvind Panagariya, has recommended retaining states' share in Central taxes at 41 per cent for the five-year period beginning April 1, 2026.</p>.<p>Finance Minister <a href="https://www.deccanherald.com/search?q=NIrmala%20Sitharaman">Nirmala Sitharaman</a>, in her Budget speech, said, "The government has accepted the recommendation of the Commission to retain the vertical share of devolution at 41 per cent".</p>.Union Budget 2026: FM Sitharaman extends tax exemption on capital goods used to make lithium-ion cells for battery storage.<p>The Centre has provided Rs 1.4 lakh crore to the states for the FY 2026-27 as Finance Commission Grants, as recommended by the commission. These include Rural and Urban Local Body and Disaster Management Grants.</p>.<p>The report of the 16th Finance Commission was tabled in Parliament by Sitharaman on Sunday.</p>.<p>The Finance Commission, which has been set up under the Constitution, provides a formula for the devolution of taxes between the Centre and states.</p>.Union Budget 2026: Govt proposes to lower debt-to-GDP ratio to 55.6% in FY27: FM Sitharaman.<p>Cesses and surcharges levied by the Centre are not part of the divisible pool.</p>.<p>The 16th Finance Commission was set up on December 31, 2023.</p>.<p>Led by Panagariya, Finance Commission members -- Retired bureaucrat Annie George Mathew, economist Manoj Panda, SBI Group Chief Economic Advisor Soumya Kanti Ghosh, and RBI Deputy Governor T Rabi Sankar -- and Secretary to the Commission Ritvik Pandey submitted the report to President Droupadi Murmu on November 17, 2025. </p>
<p>New Delhi: The 16th Finance Commission, headed by former Vice-Chairman of the <a href="https://www.deccanherald.com/search?q=Niti%20Aayog">Niti Aayog</a> Arvind Panagariya, has recommended retaining states' share in Central taxes at 41 per cent for the five-year period beginning April 1, 2026.</p>.<p>Finance Minister <a href="https://www.deccanherald.com/search?q=NIrmala%20Sitharaman">Nirmala Sitharaman</a>, in her Budget speech, said, "The government has accepted the recommendation of the Commission to retain the vertical share of devolution at 41 per cent".</p>.Union Budget 2026: FM Sitharaman extends tax exemption on capital goods used to make lithium-ion cells for battery storage.<p>The Centre has provided Rs 1.4 lakh crore to the states for the FY 2026-27 as Finance Commission Grants, as recommended by the commission. These include Rural and Urban Local Body and Disaster Management Grants.</p>.<p>The report of the 16th Finance Commission was tabled in Parliament by Sitharaman on Sunday.</p>.<p>The Finance Commission, which has been set up under the Constitution, provides a formula for the devolution of taxes between the Centre and states.</p>.Union Budget 2026: Govt proposes to lower debt-to-GDP ratio to 55.6% in FY27: FM Sitharaman.<p>Cesses and surcharges levied by the Centre are not part of the divisible pool.</p>.<p>The 16th Finance Commission was set up on December 31, 2023.</p>.<p>Led by Panagariya, Finance Commission members -- Retired bureaucrat Annie George Mathew, economist Manoj Panda, SBI Group Chief Economic Advisor Soumya Kanti Ghosh, and RBI Deputy Governor T Rabi Sankar -- and Secretary to the Commission Ritvik Pandey submitted the report to President Droupadi Murmu on November 17, 2025. </p>