Finance Commission of India
The Finance Commission is a constitutional body. Finance Commission is constituted by the President of India under Article 280 of the Indian Constitution. Its primary function is to define the financial relations between the central government of India and the individual state governments. It was first formed in 1951.
Finance Commission of India in Hindi
Composition of Finance Commission
It comprises a Chairman who had public affairs experience and Four Members. The Parliament determines the qualifications of the members of the Commission and their selection methods. The 4 members should be or have been qualified as High Court judges, or be knowledgeable in finance or experienced in financial matters and are in administration, or possess knowledge in economics. All the appointments are made by the President of India.
Finance Commission Functions
It shall be the duty of the Finance Commission to make recommendations to the President in relation to the:
• Distribution of ‘net proceeds’ of taxes between the Center and the States, to be divided as per their respective contributions to the taxes.
• Determine factors governing Grants-in-Aid to the states and the magnitude of the same.
• To make recommendations to the president as to the measures needed to augment the Fund of a State to supplement the resources of the panchayats and municipalities in the state on the basis of the recommendations made by the finance committee of the state.
• Any other matter related to it by the president in the interest of sound finance.
15th Finance Commission
The 15th Finance Commission was constituted in 2017. Its recommendations will cover a period of five years from the year 2021-22 to 2025-26.
Finance Commission Chairman
It is chaired by N. K. Singh, a former member of the Planning Commission.
State Finance Commission
The State Finance Commission (SFC) is created by the 73rd and 74th Constitutional Amendments (CAs) to rationalize and systematize fiscal relations at the local level in India.
• Article 243I of the Constitution mandated the State Governor to constitute a Finance Commission every five years.
• Article 243Y of the Constitution states that the Finance Commission constituted under article 243 I shall also review the financial position of the Municipalities and make recommendations to the Governor.
However, States have not been setting up their SFCs regularly as mandated by the constitutional amendment.
Finance Commission Chairman List
15 Finance Commissions have been appointed so far. Here are the names of Chairmans of these commissions:
||Dr. P.V. Rajamannar
||Dr. C. Rangarajan
||Dr. Vijay Kelkar
Finance Commission – FAQs
Q. Which article provides for the creation of the Finance Commission?
Ans. Article 280
Q. How many Finance Commissions have been constituted till now?
Q. Who is the chairman of the 15th Finance Commission?
Ans. NK Singh