GOVERNMENT ACCEPTS 16TH FINANCE COMMISSION’S RECOMMENDATION TO RETAIN VERTICAL SHARE OF DEVOLUTION AT 41 PERCENT

• 16th Finance Commission (XVI-FC) under Dr. Arvind Panagariya recommended retaining the vertical share of states at 41% of the divisible pool of central taxes.
• Government accepted this recommendation in Union Budget 2026-27 presented on 1 February 2026 by FM Nirmala Sitharaman; ₹1.4 lakh crore earmarked as Finance Commission Grants for FY 2026-27.
• Constitutional body under Article 280; award period 2026-27 to 2030-31.
• Examinable for fiscal federalism, GS-II (Polity) and GS-III (Economy).