For a visit spanning just three days, the 16th Finance Commission has cost Kerala Rs 1 crore. The budget wing of the Finance Department has issued an order authorising an amount of Rs 1 crore for clearing the pending bills towards the cost of accommodation, rent, hospitality and other related expenses in connection with the visit of the 16th Finance Commission to the state. The order says that the amount was authorised in relaxation of the economy orders in force. As per the order, the controlling officer has been directed to take timely steps to regularise the additional expenditure.

The 16th Finance Commission headed by Arvind Panagariya was on a three-day visit to Kerala in December 2024 as part of preparing the study report. The members reached Kochi and visited Kumarakom panchayat. The commission chairman and members then went to Thiruvarpu and Aymanam panchayats and reached Kovalam where they were received by the Chief Minister Pinarayi Vijayan. The commission held talks with the members of the cabinet, office bearers of gram panchayat, block panchayat and panchayat associations, chairman of the chamber of Municipal Chairman and the Mayers' council and also met the representatives of the merchant community.

A press note issued by the office of the Finance Minister ahead of the visit of the Finance Commission said that the commission's report was very significant and there was huge importance on award of financial allocation to states. Kerala will receive the grant based on the recommendations of Finance Commission from April 1, 2026.

During the visit of the commission, the Kerala Government submitted a new tax devolution formula in which the state's share from the central divisible pool will be proportional to its share in the country's total population. Kerala's share in the total population is 2.68%. The new devolution formula Kerala had recommended would take its share in the divisible pool to the 2.7%-2.9% range. As it stands, per the award of the previous 15th FC, Kerala's share is 1.925%.