NCERT notes on important GK topics for the UPSC Prelims, State PCS, CDS NDA AFCAT Exams. In this article, know about the Finance Commission of India, Its functions and qualifications of its members. (Check Other NCERT Notes Here)
Finance Commission, provided under article 280 of the Constitution of India, is a quasi-judicial body which is constituted by the President of India every fifth year or at such an earlier time as he considers necessary.
The Constitution of India envisages the Finance Commission as the “Balancing Wheel of Fiscal Federalism” in India.
The Finance Commission consists of a chairman and four other members ( they are eligible for reappointment ), to be appointed by the President.
The Parliament enacted the Finance Commission Act in 1951, specifying the qualifications of the Chairman and the members of the Commission.
QUALIFICATIONS OF THE CHAIRMAN AND THE MEMBERS OF THE FINANCE COMMISSION
The Chairman of the Finance Commission should be a person having experience in public affairs.
The members of the Finance Commission should be selected from amongst the following:
A judge of the High Court or one qualified to be appointed as one.
A person who has specialised knowledge of finance and accounts of the Government.
A person who has special knowledge of Economics.
A person who has wide experience in financial matters and in administration.
FUNCTIONS OF THE FINANCE COMMISSION
The Finance Commission is required to make recommendations to the President of India on the following matters :
The distribution of the net proceeds of taxes to be shared between the Centre and the States.
The principles which should govern the Grant-in-Aid to the States by the Centre out of the Consolidated Fund of India.
The measures needed to increase the Consolidated Fund of a State to enhance the resources of the Panchayats and the Municipalities in the State on the basis of the recommendations made by the State Finance Commission.
[The above function (function number 3) is added by the 73rd and 74th Constitutional Amendment Act of 1992.]
Any other matter referred to the Finance Commission by the President in the interest of sound finance.
The Commission submits its report to the President. The President then lays the report before both the Houses of the Parliament along with an explanation as to the actions taken on its recommendations.
The recommendations made by the Finance Commission are only of advisory nature and hence, not binding on the government.
Also Read: Borrowed Features of our Constitution - NCERT Notes
