NEW DELHI: The Indian government on Sunday appointed Arvind Panagariya the chairman of new Finance Commission that will recommend how federal taxes will be shared with states.

In 2017, Panagariya, an Indian-born, U.S.-educated economist, resigned from the government’s main policy think-tank, after he was hand picked by Prime Minister Narendra Modi to lead the newly created body that replaced the former planning commission that drew Soviet-style five year economic plans.

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Every five years, India sets up a Finance Commission to suggest the formula for sharing of taxes between the federal and state governments, and make recommendations on public finances.

Presently, India shares 42% of federal taxes with states.

“The Commission shall make its report available by October 31, 2025 covering a period of five years commencing on the 1stday of April, 2026,” the government order said.