Finance Commission UPSC Notes
The Finance Commission of India is a constitutional body established under Article 280. Its main function is to recommend the distribution of revenue and financial resources between the central government and the state.
The Finance Commission of India was established in 1951. It is formed to determine the financial relationship between the center and the states. According to the constitution, the commission consists of a chairman and four other members every five years. •
- Website: fincomindia.nic.in
- Established: 22 November 1951
- Purpose: Maintain financial relations between the center and the state
- Jurisdiction: Government of India
- Headquarters: New Delhi
- First executive: Kshitish Chandra Neogy
Article 280 related to Finance Commission of India
- Recommend the distribution of revenue resources between the central and state governments.
- Recommend the sharing of central tax revenues, and grants-in-aid to states.
- Submits its recommendations to the President periodically, typically every five years.
Composition of Finance Commission
- Chairman: The Finance Commission is headed by a Chairman.
- Members: The Finance Commission consists of four other members.
Functions of Finance Commission of India
- Provide recommendations for the sharing of tax revenues between the centre and states.
- Suggests Grants-in-Aid to states.
- Improve fiscal responsibility and financial management.
- Reviews the financial status of the central and state such as revenue and expenditure patterns.
- Serves as an advisory body to the President on financial matters.
- Consults with various stakeholders and experts in finance and economics.
Important Points to Remember: Finance Commission of India
01. In 2013 the Fourteenth Finance Commission was formed under the presidency of Y. V. Reddy (whose term lasted from 2015 to 2020).
02. At present (2022 Oct), the 15th Finance Commission has been constituted under the chairmanship of Nanda Kishor Singh, whose term started in 2020.
List of Chairman in Finance Commission
| Finance Commission | Chairman | Appointed |
|---|---|---|
| 1st | K.C. Neogy | 1951 |
| 2nd | K. Santhanam | 1956 |
| 3rd | A.K. Chanda | 1960 |
| 4th | Dr. P.V. Rajamannar | 1964 |
| 5th | Mahavir Tyagi | 1968 |
| 6th | Brahamananda Reddy | 1972 |
| 7th | J.M. Shelat | 1977 |
| 8th | Y.B. Chavan | 1982 |
| 9th | N.K.P. Salve | 1987 |
| 10th | K.C. Pant | 1992 |
| 11th | A.M. Khusro | 1998 |
| 12th | Dr. C. Rangarajan | 2002 |
| 13th | Dr. Vijay Kelkar | 2007 |
| 14th | Y.V. Reddy | 2013 |
| 15th | N.K Singh | 2017 |
| 16th | Arvind Panagariya | 2024 |