# 16th Finance Commission shifts focus from equity to fiscal efficiency 2026-08-06T14:37:09+00:00 | Governance | Indian Opinion Desk Corroboration: 1 independent outlet The 16th Finance Commission, chaired by Arvind Panagariya for 2026-31, has retained States’ share of divisible Union taxes at 41% but proposed a sharp restructuring of grants. Its report recommends Rs 9.47 lakh crore in grants, down from Rs 10.1 lakh crore under the 15th Finance Commission. Their share of total transfers would fall from 19.4% to 8.3%. The Hindu’s editorial says the Commission would end revenue deficit, sector-specific and State-specific grants, retaining grants mainly for local bodies and disaster management. It argues that this efficiency-focused approach could weaken fiscal equalisation, especially for States such as Kerala, Punjab, hill States and the north-east, whose national contributions or structural costs are not fully captured by formula-based devolution. ## Coverage - thehindu.com Tags: Finance Commission, fiscal federalism, grants, states, Union government Canonical: https://indianopinion.org/16th-finance-commission-shifts-focus-from-equity-to-fiscal-efficiency/ License: Summary and commentary (c) Indian Opinion, reusable with attribution. Facts belong to the linked sources. Cite: https://indianopinion.org/16th-finance-commission-shifts-focus-from-equity-to-fiscal-efficiency/#story-in-brief Review state: restored archive article, accurate at time of publication, not offered to search indexes.