Question

Choose the correct statement(s) regarding the qualifications of Finance Commission members.

i) The Chairman must have experience in public affairs.

ii) One member must be a judge of the Supreme Court or qualified to be one.

iii) One member must have specialized knowledge of government finance and accounts.

iv) One member must have special knowledge of economics.

• A. i, iii, and iv
• B. ii and iii
• C. ii and iii
• D. i and ii

Answer 1

Answer:

A. i, iii, and iv

Finance Commission

• Constitutional Body: The Finance Commission is a constitutional body established under Article 280 of the Indian Constitution. Its primary role is to recommend the distribution of financial resources between the Union and the States, and among the States themselves.

• Composition: The Finance Commission consists of a Chairman and four other members.

• Qualifications: While the Constitution specifies the qualifications for the Chairman and members, Parliament has the power to prescribe them by law. The current understanding and practice are based on the Acts passed by Parliament.

• Chairman's Qualification: The Chairman is typically expected to have experience in public affairs. This ensures that the head of the commission has a broad understanding of governance and administrative matters.

• Member Qualifications:

  • One member should be a person who is, or has been, or is qualified to be appointed a Judge of a High Court. (Note: The statement in the question mentioning Supreme Court judge is incorrect as per usual interpretation and practice).

  • Another member should have specialized knowledge of government finance and accounts. This ensures financial prudence and expertise in managing public finances.

  • The fourth member should have a deep understanding of economics. Economic expertise is crucial for analyzing fiscal policies and resource allocation.

• Appointment: Members are appointed by the President of India.

• Tenure and Reappointment: Members hold office for the period specified by the President in his order. They are eligible for reappointment.

• Functions: The Finance Commission makes recommendations on:

  • The distribution between the Union and States of the net proceeds of taxes.

  • The allocation of the respective shares of such proceeds among the States.

  • Grants-in-aid to States from the Consolidated Fund of India.

  • Measures to augment the Consolidated Fund of a State to supplement the resources of the Panchayats and Municipalities.

• Recent Trends: Finance Commissions play a vital role in fiscal federalism, often recommending significant changes in revenue sharing and grants, impacting the financial autonomy of states.