India, Jan. 29 -- The forthcoming Budget would incorporate the recommendations of the 16th Finance Commission which has already submitted its report to President Droupadi Murmu. The Finance Commission, which has been set up under the Constitution, provides a formula for devolution of taxes between Centre and States. Cesses and surcharge levied by Centre are not part of the divisible pool.

The Finance Commission is a constitutional body that gives suggestions on Centre-State financial relations and is set up periodically. The 16th Finance Commission, headed by former Vice Chairman of Niti Aayog Arvind Panagariya, was set up on December 31, 2023.

Led by Panagariya, Finance Commission members - Retired bureaucrat Annie George Mathew, econo...