New Delhi, Feb 14 (IANS): Finance Ministry on Wednesday said that the 16th Finance Commission held its first meeting on Wednesday to discuss its terms of reference and other matters that it has to take up.

The commission acknowledged the need for wide-ranging consultations with various stakeholders, including state governments, local bodies, Union ministries, and experts, the statement said.

It recognised that it would be carrying out detailed analytical work and would be required to rope in all the expertise that it could garner, including from leading research organisations, think tanks, and other organisations working in the area of fiscal federal relations, the statement added.

The commission, constituted by the president to define the financial relations and tax sharing formula between the Central government and the states. It will take a decision on the amount of devolution of taxes from the Centre to states. The commission will set up its office at Jawahar Vyapar Bhawan on Janpath in New Delhi.

It will make its recommendations available by 31 October 2025, covering an award period of five years beginning 1 April 2026.

The finance commission, chaired by economist Arvind Panagariya, is tasked with working out the formula for the distribution of the Centre’s tax revenue to states for five years starting 2026-27. It is also expected to ensure that states have efficient systems and measures in place for financing local bodies as advised by the state finance commissions.

Former expenditure secretary and member of the 15th Finance Commission, A.N. Jha, former special secretary of the department of expenditure Annie George Mathew, and executive director of Artha Global Niranjan Rajadhyaksha have been appointed as full-time members of the finance commission while SBI chief economic adviser Soumya Kanti Ghosh is a part-time member.