Introduction


The Constitution of India, Article 280 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.


Constitution of Finance Commission - 


   The Finance Commission shall consist of a Chairman and four other members appointed by the President. Parliament may by law prescribe qualifications which shall be requisite for appointment as a member of the commission and the manner in which they shall be selected.

    In exercise of the power under article 80(1), Indian Parliament has passed the Finance Act, 1951.It Provides that the chairman of the commission shall be elected from among person who have had experience in public affairs. The other four members shall be selected from among persons who
(1) are or have been, or are qualified to be appointed as a Judges of High Court; or

(2) have special knowledge of the Finance and accounts of Government, or

(3) have had wide experience in financial matters and in administration, or


(4) have special knowledge of Economics.


Term of Office 


  The members of the commission shall hold office for such period as may be specified in the Presidential Order and shall be eligible for reappointment.


See...Financial Bills - Kinds of Financial Bills | Constitutional Law

Finance Commission (Indian Constitution Article - 280)


       (1) The President shall, within two years from the commencement of this Constitution and thereafter at the expiration of every fifth year or at such earlier time as the President considers necessary, by order constitute a Finance Commission which shall consist of a Chairman and four other members to be appointed by the President.

       (2) Parliament may by law determine the qualifications which shall be requisite for appointment as members of the Commission and the manner in which they shall be selected.

      (3) It shall be the duty of the Commission to make recommendations to the President as to-

             (a) the distribution between the Union and the States of the net proceeds of taxes which are to be, or may be, divided between them under this Chapter and the allocation between the States of the respective shares of such proceeds;

             (b) the principles which should govern the grants-in-aid of the revenues of the States out of the Consolidated Fund of India;

            (bb) the measures needed to augment the Consolidated Fund of a State to supplement the resources of the Panchayats in the State on the basis of the recommendations made by the Finance Commission of the State;

             (c) the measures needed to augment the Consolidated Fund of a State to supplement the resources of the Municipalities in the State on the basis of the recommendations made by the Finance Commission of the State;

             (d) any other matter referred to the Commission by the President in the interests of sound finance.

     (4) The Commission shall determine their procedure and shall have such powers in the performance of their functions as Parliament may by law confer on them.

See also...

Duties of Finance Commission

Ordinance making power of the President 


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