Tax Revenue Recommendations of 16th Finance Commission Presented in LS

Today, Finance Minister Nirmala Sitharaman presented the 16th Finance Commission report in the Lok Sabha, outlining recommendations for the devolution of tax revenues between the Centre and the states for the period 2026–2031. The Finance Commission, constituted under Article 280 of the Indian Constitution, is a constitutional body that periodically reviews and suggests the allocation of tax revenues between the central and state governments. It is important to note that cesses and surcharges collected by the Centre are excluded from the divisible pool. By providing these recommendations, the Finance Commission plays a key role in shaping Centre–state financial relations and ensuring balanced fiscal federalism.

Following the presentation of the Union Budget, Ms. Sitharaman also introduced the Finance Bill 2026 in the Lok Sabha. Alongside this, she laid out statements mandated under the Fiscal Responsibility and Budget Management (FRBM) Act, 2003, including the Medium-Term Fiscal Policy cum Fiscal Policy Strategy Statement and the Macro-Economic Framework Statement, which provide a structured framework for the country’s fiscal strategy and economic outlook over the medium term.