Page 251 - General Knowledge

GENERAL KNOWLEDGE 2019

 Dr.B.R.Ambedkar, Father of Indian constitution played a vital role in the formation of Finance
Commission.
 The Finance Commission comes under the Article 280 of Indian Constitution.
 The Finance Commission was constituted mainly to give its recommendations on distribution
of tax revenues between the Union and the States and amongst the States themselves.
 The Finance Commission consists of 5 members.
 The Finance Commission is appointed by the President of India.
 The Chairman of Finance Commission is selected among people who have had experience
of public affairs.
 Finance Commission also serves a constitutional body for the purpose of allocation of certain
resources of revenue between the Union and the State Governments.
 It was established under Article 280 of the Indian Constitution by the President of India.
 It was formed to define the financial relations between the centre and the state.
 Finance Commission of India was formulated with the purpose of allocation of resources
between the Union and the States.
 It is constituted by the President and all appointments to the commission are made by him
as well.
 Finance Commission of India was formed in the year 1951 under Article 280 of the
Constitution of India.
 The Commission was structured according to the world standards.
 The objective of forming the Finance Commission was to allocate resources of the revenue
between the Union and the State Governments in India adequately.
Role of Finance Commission in India
 The role Finance Commission in India is to act as an instrument to divide proceeds of
divisible taxes between the states and the Union government or in cases of taxes that are
collected by the centre but the proceeds of which are allocated between the states, to
determine the principles of such allocation.
 The Finance commission of India also determines the principles of governing the grants-in-
aids of the revenues of states out of the consolidated fund of India.
Composition of Finance Commission
 Accordingly, the first Finance Commission (Miscellaneous Provisions) Act was passed
in 1951 which is amended in 1955.
 This Act lays down the qualification and disqualification of the chairman and members of
the Finance Commission.
Qualifications

 The chairman shall be appointed from among persons of public eminence and the four
members should be:
 Qualified to become the judges of the High Court, or
 Have special knowledge of finances and accounts of the Government, or
 Have wide experience in financial administrative or economic affairs.
Disqualifications

 A person is disqualified to become a member of the Finance commission if:
 The person is mentally unsound, or
 The person is an undischarged insolvent, or
 The person has been convicted and found guilty of immoral offence, or

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