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Article 280 of the Constitution of India provides for a Finance Commission as a quasi-judicial body. It is constituted by the president of India every fifth year or at such earlier time as he considers necessary.
The Finance Commission consists of a chairman and four other members to be appointed by the president. They hold office for such period as specified by the president in his order. They are eligible for reappointment. The Parliament has specified the qualifications of the chairman and members of the commission. The chairman should be a person having experience in public affairs and the four other members should be selected from amongst the following:
FUNCTIONS: The Finance Commission is required to make recommendations to the president of India on the following matters:
NEED TO SET UP STATE FINANCE COMMISSION
The 15th Finance Commission (headed by N K Singh) recently held a detailed meeting with RBI.
Key issues that were discussed
15th Finance Commission (FC)
State Finance Commissions (SFCs)
The State Finance Commission (SFC) is an institution created by the 73rd and 74th Constitutional Amendments (CAs) to rationalize and systematize State/sub-State-level fiscal relations in India.
(i) Article 2431 of the Constitution mandated the State Governor to constitute a Finance Commission every five years.
(ii) Article 243Y of the Constitution states that the Finance Commission constituted under article 243 I shall also review the financial position of the Municipalities and make recommendations to the Governor.