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RBI Deputy Governor T Rabi Sankar has been appointed as a part-time member of the 16th Finance Commission, the finance ministry said on Saturday.

The appointment, the ministry said, is consequent to the resignation of one of the full-time members, former finance secretary Ajay Narayan Jha, on personal grounds.

"The President has appointed T Rabi Sankar, Deputy Governor, Reserve Bank of India (RBI), as a part-time Member of the 16th Finance Commission (XVIFC)," the ministry said in a statement.

Sankar will hold office from the date of assuming charge until the submission of the Commission's Report or October 31, 2025, whichever is earlier, it added.

The commission, chaired by former vice chairman of Niti Aayog Arvind Panagariya, has four members and is assisted by Secretary Ritvik Pandey, two joint secretaries and one economic advisor.

Retired bureaucrat Annie George Mathew and economist Manoj Panda are full-time members of the commission, while SBI Group Chief Economic Advisor Soumya Kanti Ghosh is a part-time member.

The government constituted the 16th Finance Commission under the chairmanship of Panagariya on December 31, 2023. The panel would submit its report to the President by October 31, 2025. The report would be for five years commencing April 1, 2026.

Besides suggesting tax devolution between the Centre and states and revenue augmentation measures, the commission will review the present arrangements for financing disaster management initiatives with reference to the funds constituted under the Disaster Management Act, 2005.

The Finance Commission is a constitutional body to provide suggestions on centre-state financial relations.

The erstwhile 15th Finance Commission under NK Singh had recommended that states be given 41 per cent of the divisible tax pool of the Centre during the five-year period 2021-22 to 2025-26, which is at the same level as was recommended by the 14th Finance Commission under YV Reddy.