---
title: "Sixteenth Finance Commission: India 2026-31 | Model Diplomat"
description: "The Sixteenth Finance Commission, established in 2023, advises on tax revenue distribution between the Union and states for 2026-2031, impacting fiscal policy."
url: "https://modeldiplomat.com/learn/glossary/sixteenth-finance-commission"
---

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Model Diplomat Research Team · Last reviewed June 22, 2026

TL;DR

- The Sixteenth Finance Commission is the constitutional body constituted by the President of India in 2023 to recommend the distribution of tax revenues between the Union and the states for 2026 to 2031.
- What is the reference period of the Sixteenth Finance Commission's award?
- How does the Finance Commission differ from the GST Council?
- Why do southern states object to the population criterion?
- Are the Finance Commission's recommendations binding on the Union government?

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

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## Timeline

1. 31 December 2023

   Acting on Cabinet approval, the President constituted the Commission by notification on .

2. 1 April 2026

   The ToR direct the Commission to make its award for the five-year period commencing , and to submit its report by 31 October 2025.

3. 31 October 2025

   The ToR direct the Commission to make its award for the five-year period commencing 1 April 2026, and to submit its report by .

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President Droupadi Murmu constituted the Sixteenth Finance Commission on 31 December 2023, appointing Arvind Panagariya as chairman with a mandate to submit recommendations for the 2026-31 award period by 31 October 2025.

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