16th Finance Commission Agenda

The 16th Finance Commission (FC) of India, established under Article 280 of the Indian Constitution, aims to ensure fair distribution of funds among all levels of government, including local bodies. The 73rd and 74th constitutional amendments have empowered local governments, necessitating financial support for panchayats and municipalities. Cities, contributing 66% of India's GDP and 90% of government revenue, face funding and infrastructure challenges. Urban Local Bodies (ULBs) receive only 0.5% of GDP in intergovernmental transfers (IGTs), much lower than other developing nations. The Goods and Services Tax (GST) has further reduced ULBs' revenue, increasing reliance on IGTs. Parallel agencies and schemes like MP/MLA Local Area Development distort fiscal autonomy. The delay