Chapter 42: FINANCE COMMISSION

Introduction

President appoints this every five years or earlier if necessary. It a quasi judicial body under Article 280. Recommendations of the finance commission are not binding. Fourteenth finance commission under V. Y. Reddy submitted report on 2014 implementation time is 2015-2020.

 

Composition:

1.    Commission has chairman and four members appointed by the president. Their term is decided by the president and they are eligible for re appointment.

Qualifications:

Constitution authorises parliament to decide qualification of members. Parliament specifies chairman to be a person of experience in public affairs. Other members should be selected from amongst following:

 

        1.      Judge of HC or one qualified to be appointed as one.

   2.      Person with specialised knowledge of finance and accounts.

   3.      Person with experience in financial matters and administration.

   4.     
Person with specialised knowledge of economics.


Functions:


1.      Distribution of net proceeds of tax between centre and states and allocation of it between states.

2.      Principles governing grants in aid to states from centre

     3.    Measures needed to augment consolidated fund of states to supplement resources of panchayats and municipality as recommended by State finance commissions.

       4.    Any other matter specified to it by president in interest of sound finance.

Quiz

Score more than 80% marks and move ahead else stay back and read again!