PPT: Finance Commission | Indian Polity for UPSC CSE PDF Download

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Finance Commission of India
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Finance Commission of India
Introduction to Finance Commission
Constitutional Body
Established under Article 280 of the Indian 
Constitution
Quinquennial Setup
Established every 5 years by the President of 
India
Resource Distribution
Recommends distribution of financial resources 
between Centre and States
Fiscal Balance
Plays a key role in maintaining fiscal federalism in 
India
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Finance Commission of India
Introduction to Finance Commission
Constitutional Body
Established under Article 280 of the Indian 
Constitution
Quinquennial Setup
Established every 5 years by the President of 
India
Resource Distribution
Recommends distribution of financial resources 
between Centre and States
Fiscal Balance
Plays a key role in maintaining fiscal federalism in 
India
Why Do We Need a Finance 
Commission?
Federal Balance
India's federal structure requires balanced 
financial relations between Centre and States
Vertical Imbalance
Centre collects more revenue, but States have 
more expenditure responsibilities
Horizontal Imbalance
Economic disparities among States need to be 
addressed for balanced growth
Bridge Builder
Finance Commission bridges these gaps 
through tax devolution and grants
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Finance Commission of India
Introduction to Finance Commission
Constitutional Body
Established under Article 280 of the Indian 
Constitution
Quinquennial Setup
Established every 5 years by the President of 
India
Resource Distribution
Recommends distribution of financial resources 
between Centre and States
Fiscal Balance
Plays a key role in maintaining fiscal federalism in 
India
Why Do We Need a Finance 
Commission?
Federal Balance
India's federal structure requires balanced 
financial relations between Centre and States
Vertical Imbalance
Centre collects more revenue, but States have 
more expenditure responsibilities
Horizontal Imbalance
Economic disparities among States need to be 
addressed for balanced growth
Bridge Builder
Finance Commission bridges these gaps 
through tax devolution and grants
Composition and Appointment
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5-Member Team
Consists of a Chairman plus 4 members 
appointed by the President
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Experienced Leadership
Chairman must have extensive experience in 
public affairs
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Expert Members
Includes experts from judiciary, finance, 
administration, and economics
0 4
Term Length
Members serve for a term specified by the 
President, usually 5 years
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Finance Commission of India
Introduction to Finance Commission
Constitutional Body
Established under Article 280 of the Indian 
Constitution
Quinquennial Setup
Established every 5 years by the President of 
India
Resource Distribution
Recommends distribution of financial resources 
between Centre and States
Fiscal Balance
Plays a key role in maintaining fiscal federalism in 
India
Why Do We Need a Finance 
Commission?
Federal Balance
India's federal structure requires balanced 
financial relations between Centre and States
Vertical Imbalance
Centre collects more revenue, but States have 
more expenditure responsibilities
Horizontal Imbalance
Economic disparities among States need to be 
addressed for balanced growth
Bridge Builder
Finance Commission bridges these gaps 
through tax devolution and grants
Composition and Appointment
0 1
5-Member Team
Consists of a Chairman plus 4 members 
appointed by the President
0 2
Experienced Leadership
Chairman must have extensive experience in 
public affairs
0 3
Expert Members
Includes experts from judiciary, finance, 
administration, and economics
0 4
Term Length
Members serve for a term specified by the 
President, usually 5 years
Qualifications of Members
As per Finance Commission Act, 1951, members must be highly qualified in specific domains:
Chairman
Must have extensive experience in 
public affairs and financial matters
Judicial Expert
A High Court judge or someone 
qualified for High Court judgeship
Finance Expert
Deep knowledge of government 
finance and accounts
Administration Expert
Experienced administrator with expertise in financial 
matters
Economics Expert
Economist with specialized knowledge in relevant fields
These qualifications ensure that the Commission has the right mix of expertise to handle complex financial matters.