Article 280 of the Indian Constitution provides for the establishment of a Finance Commission by the President. It is the duty of the Finance Commission to make recommendations to the President regarding the distribution of net proceeds of taxes, principles governing grants-in-aid of the revenue from the consolidated fund of India. Step to augment the consolidated fund of India for Panchayats, any other matter referred in the interest of sound Finance.
Duties of the Finance Commission
(1) the distribution between Union and the States of the net proceeds of taxes which are to be, or maybe, divided between them, and the allocation between the States of the respective shares of such proceeds;
(2) the principle which should govern the grant-in-aid of the revenues of the State out of the consolidated fund of India;
(3) the measures needed to augment the consolidated fund of State to supplement the resources of panchayats in the State on the basis of recommendations made by the Finance Commission of the state.
(4) Any other matter referred to the Commission by the President in the interest of sound finance.
The commission shall determine their procedure and shall have powers in the performance of their functions as Parliament may by law confer on them.
Article 281 of the Indian Constitution says that the President shall cause every recommendation of the Finance Commission to be laid before each House of Parliament together with an explanatory memorandum.
Kinds of Bills | Constitutional Law