What is Finance Commission?
The Finance Commission of India is a constitutional body constituted by the President of India under Article 280 of the Indian Constitution. The Finance Commission is constituted to recommend the distribution of tax revenue between the Central and State Governments. It is also responsible for laying down the principles that govern grants-in-aid provided by the Central Government to the States. The first Finance Commission was constituted in 1951 and headed by K.C. Niyogi became the first Finance Chairman of India. Read the article for detailed information about Finance Commission of India.
Composition of Finance Commission
The Finance Commission consists of a Chairman who has experience in public affairs and four members. Parliament determines the qualifications of the members of the Commission and the methods of their selection. All four members must be or have been qualified as judges of a High Court, or be knowledgeable in finance, or be experienced in financial matters and administration, or have knowledge in economics. All appointments are made by the President of India.
Functions of Finance Commission
It shall be the duty of the Finance Commission to make recommendations to the President in respect of:
- To determine the consolidated funds of the States and the factors controlling their quantum.
- To make recommendations to the President regarding measures necessary for augmenting the Consolidated Fund of the State to supplement the resources of the Municipalities and Panchayats in the State on the basis of recommendations made by the State Finance Commission.
- Any other matter referred to the Commission by the President in the interest of sound finances.
- Distribution of ‘net proceeds’ of taxes between the Center and the States, allocated according to their respective contributions to taxes.
15th finance commission
The 15th Finance Commission was constituted in 2017. Its recommendations will cover a five-year period from 2021-22 to 2025-26.
Chairman of Finance Commission
Its chairman is NK Singh, former member of the Planning Commission.
State Finance Commission
The State Finance Commission (SFC) has been created by the 73rd and 74th Constitutional Amendments (CA) to rationalize and organize fiscal relations at the local level in India.
- articles of the constitution 243I It mandated the Governor of the state to constitute a Finance Commission every five years.
- articles of the constitution 243Y In It has been said that the Finance Commission constituted under Article 243 will also review the financial position of the municipalities and make recommendations to the Governor.
However, states are not regularly constituting their State Finance Commission as mandated by the constitutional amendment.
States and Capitals
Union Territories in India
List of Chairman of Finance Commission
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