Bhubaneswar: Former senior bureaucrat Arun Kumar Panda will head the 6th State Finance Commission, the constitution of which was notified by the State Government on Wednesday.
Prof. Asit Ranjan Mohanty XIMB; Prof. Amaresh Samantray Department of Economics Pondichery University and Dr. Bibhu Prasad Nayak Professor TISS will be the Members while Dr. Satya Priya Rath Additional Secretary Finance Department will be the Member Secretary.
The Chairman and other Members of the Commission including Member Secretary shall hold office for a period of six months from the date of this Notification.
The Chairman and other Members (except the Member-Secretary) shall render whole time or part time service to the Commission. The Member- Secretary shall render whole time service to the Commission in addition to his own duties.
The Commission shall make recommendations relating to the following matters. The principles that should govern are the distribution between State and 3-tier Panchayati Raj Institutions and Urban Local Bodies of net proceeds of taxes, duties, tolls and fees leviable by the State which may be divided amongst them under Part-IX and Part-IXA of the Constitution and the allocation between 3-tier Panchayati Raj Institutions and Urban Local Bodies of their respective shares of such proceeds; the determination of taxes, duties, tolls and fees which may be assigned to, or appropriated by 3-tier Panchayati Raj Institutions and Urban Local Bodies; and the Grants-in-aid to 3-tier Panchayati Raj Institutions and Urban Local Bodies from the Consolidated Fund of the State– the measures needed to improve the financial position of 3-tier Panchayati Raj Institutions and Urban Local Bodies; and any other matter, which the Governor may refer to the Commission in the interest of sound finance of 3-tier Panchayati Raj Institutions and Urban Local Bodies.
In making its recommendations, the Commission shall have regard, among other considerations, to the revenue proceeds of the State Government and the demands thereon, on account of expenditure on Civil Administration, Police and Judicial Administration, Education, Maintenance of Capital assets, Social Welfare, Debt Servicing and other committed expenditures and liabilities; the functions and liabilities of 3-tier Panchayati Raj Institutions and Urban Local Bodies in respect of discharging and implementing the schemes entrusted to them under articles 243G and 243W of the Constitution; the revenue resources of 3-tier Panchayati Raj Institutions and Urban Local Bodies for five years, commencing from 1 April, 2026 on the basis of levels of taxation reached in 2023-24, target set for additional resource mobilization and potential for mobilizing additional resources; the scope for better fiscal management consistent with the need for speed, efficiency and cost effectiveness of delivery of services; and the need for providing adequate incentive for better resource mobilization as well as closely linking expenditure and revenue raising decisions.
The report of the Commission shall contain specific chapters, narrating the approach adopted by it; an analysis of the resources of the State Government; an analysis of the resources of 3-tier Panchayati Raj Institutions and Urban Local Bodies and make concrete recommendations for improvements; and an estimation and analysis of the finances of the State Government as well as 3-tier Panchayati Raj Institutions and Urban Local Bodies at the pre and post transfer stages along with a quantification of the revenues that could be generated additionally by 3-tier Panchayati Raj Institutions and Urban Local Bodies by adopting the measures recommended therein.
For the purpose of assessment of supplementing the resources of 3-tier Panchayati Raj Institutions and Urban Local Bodies by the Central Finance Commission, the Commission shall follow a normative approach in the assessment of revenues and expenditure rather than make forecasts based on historical trends; take into account per capita norms for revenue generation, the data relating to the tax bases and avenues for raising non-tax income by 3-tier Panchayati Raj Institutions and Urban Local Bodies, assuming reasonable buoyancies and the scope for additional resource mobilization; and take into account per capita expenditure norms on the basis of the average expenditure incurred by some of the best performing Panchayati Raj Institutions and Urban Local Bodies in the provision of core services.
The Commission shall also review implementation of the recommendations of Fifth State Finance Commission.
The Commission shall make its report within a period of six months from the date of publication of this Notification covering an award period of five years commencing from 1 day of April, 2026.
It shall also indicate the basis on which it has arrived at its findings.
