---
title: "Finance Commission (Article 280): Role & Powers"
description: "The Finance Commission, under Article 280, allocates tax revenues between India's Union and states, impacting fiscal federalism and governance."
url: "https://modeldiplomat.com/learn/glossary/finance-commission-article-280"
---

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Model Diplomat Research Team · Last reviewed June 22, 2026

TL;DR

- The Finance Commission is a constitutional body under Article 280 that recommends the distribution of tax revenues between the Union and the states of India.
- Are the Finance Commission's recommendations binding on the Union government?
- How does the Finance Commission differ from the GST Council?
- Why did the Fifteenth Finance Commission's terms of reference cause controversy?
- What is the divisible pool and why does it shrink relative to total Union revenue?

[Civil Service & Diplomatic Exams](https://modeldiplomat.com/learn/civil-services/glossary)Updated June 22, 2026

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## Timeline

1. 31 December 2023

   The Sixteenth Finance Commission, chaired by Arvind Panagariya, was constituted by Presidential order on to cover the award period from 1 April 2026 to 31 M…

2. 1 April 2026

   The Sixteenth Finance Commission, chaired by Arvind Panagariya, was constituted by Presidential order on 31 December 2023 to cover the award period from to…

3. 31 March 2031

   The Sixteenth Finance Commission, chaired by Arvind Panagariya, was constituted by Presidential order on 31 December 2023 to cover the award period from 1 Ap…

4. 31 October 2025

   The Sixteenth Finance Commission, chaired by Arvind Panagariya, was constituted by Presidential order on 31 December 2023 to cover the award period from 1 Ap…

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On 31 December 2023, the President of India constituted the Sixteenth Finance Commission under the chairmanship of economist Arvind Panagariya to recommend tax devolution for the period 1 April 2026 to 31 March 2031.

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