The Finance Commission

1. Generally, in India Finance Commission is appointed for every five years- [U.P.U.D.A./L.D.A. (Pre) 2002]

(a) To determine the financial position of the States.
(b) To determine the financial position of Central Government.
(c) To determine the financial resources of Central Government.
(d) To determine the share of the States in the grants and revenues of the Central Government.

Correct Answer: (d) To determine the share of the States in the grants and revenues of the Central Government.

Solution:Article 280 of the Constitution provides for the formation of the Finance Commission after the expiration of every fifth year or at such earlier time as the President considers necessary. Its main function is to submit recommendations to the President regarding the allocation of net proceeds of taxes between the Union and the States and the method of distribution among the States. It may be mentioned that the first Finance Commission was set up on 6th April, 1952 under the Chairmanship of K.C. Neogy.

2. Which of the following Article is related to the appointment of a Finance Commission by the President of India? [U.P.R.O./A.R.O. (Mains) 2021]

(a) 200
(b) 250
(c) 280
(d) None of the above

Correct Answer: (c) 280

Solution:Article 280 of the Constitution provides for the formation of the Finance Commission after the expiration of every fifth year or at such earlier time as the President considers necessary. Its main function is to submit recommendations to the President regarding the allocation of net proceeds of taxes between the Union and the States and the method of distribution among the States. It may be mentioned that the first Finance Commission was set up on 6th April, 1952 under the Chairmanship of K.C. Neogy.

3. With reference to the Finance Commission of India, consider the following statements [67th B.P.S.C. (Pre), 2021]

1. The Finance Commission is a statutory body

2. The finance Commission was set up under Article 280 of the Constitution

3. The recommendations made by the Finance Commission are only advisory in nature.

4. The First Finance Commission was set up in 1950.

Which of the above statements are correct?

(a) 1 and 4 only
(b) 3 and 4 only
(c) 2 and 3 only
(d) 2 and 4 only

Correct Answer: (c) 2 and 3 only

Solution:Article 280 of the Constitution provides for the formation of the Finance Commission after the expiration of every fifth year or at such earlier time as the President considers necessary. Its main function is to submit recommendations to the President regarding the allocation of net proceeds of taxes between the Union and the States and the method of distribution among the States. It may be mentioned that the first Finance Commission was set up on 6th April, 1952 under the Chairmanship of K.C. Neogy.

4. Under which one of the following Articles is the formation of Finance Commission laid down? [B.P.S.C. (Pre) 2018]

(a) Article 280
(b) Article 269
(c) Article 268
(d) Article 265

Correct Answer: (a) Article 280

Solution:Article 280 of the Constitution provides for the formation of the Finance Commission after the expiration of every fifth year or at such earlier time as the President considers necessary. Its main function is to submit recommendations to the President regarding the allocation of net proceeds of taxes between the Union and the States and the method of distribution among the States. It may be mentioned that the first Finance Commission was set up on 6th April, 1952 under the Chairmanship of K.C. Neogy.

5. Financial distribution between the Union and the States takes place on the basis of the recommendations of the - [Uttarakhand P.C.S. (Pre) 2002]

(a) Finance Commission
(b) Inter-State Council
(c) Planning Commission
(d) Sarkaria Commission

Correct Answer: (a) Finance Commission

Solution:Article 280 of the Constitution provides for the formation of the Finance Commission after the expiration of every fifth year or at such earlier time as the President considers necessary. Its main function is to submit recommendations to the President regarding the allocation of net proceeds of taxes between the Union and the States and the method of distribution among the States. It may be mentioned that the first Finance Commission was set up on 6th April, 1952 under the Chairmanship of K.C. Neogy.

6. Finance are distributed between the Centre and the State on the recommendations of which of the following? [U.P. Lower Sub. (Mains) 2013, U.P. Lower Sub. (Spl) (Pre) 2010]

(a) Planning Commission
(b) Public Accounts Committee
(c) Finance Commission
(d) National Development Council

Correct Answer: (c) Finance Commission

Solution:Article 280 of the Constitution provides for the formation of the Finance Commission after the expiration of every fifth year or at such earlier time as the President considers necessary. Its main function is to submit recommendations to the President regarding the allocation of net proceeds of taxes between the Union and the States and the method of distribution among the States. It may be mentioned that the first Finance Commission was set up on 6th April, 1952 under the Chairmanship of K.C. Neogy.

7. Which of the following recommends the principles for sharing of revenues among the Union and the States? [I.A.S. (Pre) 2002, Chhattisgarh P.C.S. (Pre) 2003]

(a) Finance Commission
(b) Inter-State Council
(c) Union Ministry of Finance
(d) Planning Commission

Correct Answer: (a) Finance Commission

Solution:The function of the Finance Commission is to recommend the distribution of the net proceeds of taxes between the Union and the States; the Inter-State Council is established for coordination and cooperation among states, and the main function of the Planning Commission is to allocate resources between the Centre and the States. The Planning Commission has been replaced by 'Niti Aayog' (National Institution For Transforming India).

8. Which one of the following institutions will lay down the basic principles for the distribution of the net proceeds of the taxes between the Union and States? [U.P.P.C.S. (Spl) (Mains) 2008]

(a) Planning Commission
(b) National Development Council
(c) Finance Commission
(d) Union Ministry of Finance

Correct Answer: (c) Finance Commission

Solution:The function of the Finance Commission is to recommend the distribution of the net proceeds of taxes between the Union and the States; the Inter-State Council is established for coordination and cooperation among states, and the main function of the Planning Commission is to allocate resources between the Centre and the States. The Planning Commission has been replaced by 'Niti Aayog' (National Institution For Transforming India).

9. Finance Commission is constituted after every - [U.P.P.C.S. (Mains) 2008]

(a) 3 years
(b) 2 years
(c) 5 years
(d) 4 years

Correct Answer: (c) 5 years

Solution:The function of the Finance Commission is to recommend the distribution of the net proceeds of taxes between the Union and the States; the Inter-State Council is established for coordination and cooperation among states, and the main function of the Planning Commission is to allocate resources between the Centre and the States. The Planning Commission has been replaced by 'Niti Aayog' (National Institution For Transforming India).

10. The Finance Commission is constituted for a period of- [U.P.P.C.S. (Mains) 2010, 2011]

(a) 4 years
(b) 5 years
(c) 7 years
(d) 10 years

Correct Answer: (b) 5 years

Solution:The function of the Finance Commission is to recommend the distribution of the net proceeds of taxes between the Union and the States; the Inter-State Council is established for coordination and cooperation among states, and the main function of the Planning Commission is to allocate resources between the Centre and the States. The Planning Commission has been replaced by 'Niti Aayog' (National Institution For Transforming India).

The Finance Commission

1. Generally, in India Finance Commission is appointed for every five years- [U.P.U.D.A./L.D.A. (Pre) 2002]

2. Which of the following Article is related to the appointment of a Finance Commission by the President of India? [U.P.R.O./A.R.O. (Mains) 2021]

3. With reference to the Finance Commission of India, consider the following statements [67th B.P.S.C. (Pre), 2021]

4. Under which one of the following Articles is the formation of Finance Commission laid down? [B.P.S.C. (Pre) 2018]

5. Financial distribution between the Union and the States takes place on the basis of the recommendations of the - [Uttarakhand P.C.S. (Pre) 2002]

6. Finance are distributed between the Centre and the State on the recommendations of which of the following? [U.P. Lower Sub. (Mains) 2013, U.P. Lower Sub. (Spl) (Pre) 2010]

7. Which of the following recommends the principles for sharing of revenues among the Union and the States? [I.A.S. (Pre) 2002, Chhattisgarh P.C.S. (Pre) 2003]

8. Which one of the following institutions will lay down the basic principles for the distribution of the net proceeds of the taxes between the Union and States? [U.P.P.C.S. (Spl) (Mains) 2008]

9. Finance Commission is constituted after every - [U.P.P.C.S. (Mains) 2008]

10. The Finance Commission is constituted for a period of- [U.P.P.C.S. (Mains) 2010, 2011]

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