The Finance Commission in India came into force in 1951 with introduction of “The finance commission (miscellaneous provisions) act, 1951”. The Article 280 of Constitution of India provides the constitutional status to Finance Commission. It provides the framework for financial transfers from the Union to the States.
The Constitution of India provides for the appointment of finance commission after every five years, even though new finance commission can earlier be appointed by the President of India
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The Finance Commission consists of Chairman having experience in public affairs and four other members who:
Every member of the Commission shall hold office for such period as may be specified in the order of the President appointing him.
The main responsibilities of a Finance Commission are:
Following the seventy third and seventy fourth amendments to the Constitutions, the Finance Commissions were charged with the additional responsibility of recommending measures to augment the Consolidated Fund of a State to supplement the resources of local bodies
To enable the Commission to discharge its responsibilities in an effective manner, the Constitution vests the Finance Commission with power to determine its procedures.
It is the quantum of grants to the State which are in need of assistance.
There are fourteen finance commission constituted by government since independence as per details below:
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