The panel, which would submit its report in two months, includes filmmaker Rakeysh Omprakash Mehra, adman Piyush Pandey and film critic Bhawana Somaaya.
Apart from these, National Film Development Council MD Nina Lath Gupta and Joint Secretary (Films) Sanjay Murthy would also be part of committee.
A statement released here said the panel has been formed "in sync with the vision" of Prime Minister Narendra Modi.
The recommendations of this Committee are expected to provide a holistic framework and enable those tasked with the work of certification of films to discharge their responsibilities keeping in view this framework, the statement said.
"During their deliberations, the Committee would be expected to take note of the best practises in various parts of the world, especially where the film industry is given sufficient and adequate space for creative and aesthetic expression," he said.
The Committee would recommend broad guidelines,procedures under the provisions of the Cinematograph Act, rules for the benefit of the chairperson and other members of the Screening Committee.
The staffing pattern of CBFC would also be looked into in an effort to recommend a framework which would provide efficient, transparent user friendly services, the statement added.
Friday's announcement came within days of Information & Broadcasting Minister Arun Jaitley telling PTI that the "time has come" to have a re-look at the functioning of Censor Board as he would like the Certification Board to be "controversy- free".
Filmmakers have complained of arbitrary objections and cuts sought by the Board in the recent past including the criticism for the cuts the latest James Bond movie 'Spectre' had to go through for its screening in India.
A list of banned "cuss" words, circulated by CBFC chief Pahlaj Nihalani had also become a subject of controversy.
When asked, Benegal told PTI that the I&B ministry "spoke to me a couple of days ago on telephone and I am yet to know exactly what the proposal is. There is only one question that is asked to me whether I would like to be a member of the committee, which is looking into the problem of film certification.
"This is a committee formed by the government to see how effective, transparent and satisfactory the system is."
Singer Adnan Sami becomes Indian citizen, tweets 'Jai Hind'
Odd-even woes: Carpool apps to be Delhiites' rescue mantra
Pakistan pick tainted paceman Amir for New Zealand tour