State Finances & Devolution
Government Finance · Ministry of Finance / XVI Finance Commission of India · data as of 2026-01-01
Latest value
- State Finances & Devolution: XVI Finance Commission (2026-31)
- As of: 2026-01-01
What it measures
The share of central tax revenue devolved to states, and the fiscal-responsibility limits states operate under, as determined by the Finance Commission's periodic award.
How it is calculated
A Finance Commission, constituted every five years under Article 280, recommends the vertical (Centre-states) and horizontal (inter-state) tax devolution formula based on population, income distance, area, forest cover and demographic performance criteria; accepted (wholly or in part) by the Union Cabinet.
Key figures
- Finance Commission: XVI FC (2026-31)
- XVI FC Chairman: Dr. Arvind Panagariya
- States Share in Taxes (XV FC): 41% (FY21-26 award)
- XVI FC Award Period: FY 2026-27 to 2030-31
- FRBM Fiscal Deficit Limit: 3% of GSDP (States)
Release and revisions
Published: Periodic (Finance Commission award cycle)
Once every five-year award cycle; next award due ~2031
Revisions: A new award is recommended once every five years (current: XVI FC covering FY2026-27 to FY2030-31); interim adjustments possible via Union Cabinet action on specific recommendations.
Source: Ministry of Finance / Finance Commission of India (constitutional body)