Question

Consider the following pairs matching the commission with its key characteristic:

1. Central Finance Commission : Recommendations are binding upon the Government of India.

2. State Finance Commission : Possesses the powers of a civil court under the Code of Civil Procedure, 1908.

3. 16th Finance Commission : Chaired by Shri K.C. Neogy.

How many of the above pairs are correctly matched?

• A. Only one
• B. Only two
• C. All three
• D. None

Answer 1

Answer:

A. Only one

Finance Commissions in India:

• Central Finance Commission:

  • Established under Article 280 of the Constitution of India.

  • Its primary role is to recommend the distribution of net proceeds of taxes between the Union and the States, and the allocation of the same among the States.

  • The recommendations of the Finance Commission are advisory in nature, not binding on the government. However, the government usually accepts them.

• State Finance Commission:

  • Constitutional body established under Article 243-I and 243-Y of the Constitution for Panchayats and Municipalities, respectively.

  • It recommends measures to augment the consolidated fund of the state to supplement the resources of the Panchayats and Municipalities.

  • State Finance Commissions do not possess the powers of a civil court. This power is typically associated with bodies like the National Human Rights Commission or certain tribunals.

• Finance Commissions and their Chairpersons:

  • The Finance Commission is chaired by a person who has had experience in public affairs or has held high office.

  • Shri K.C. Neogy was the Chairman of the Second Finance Commission (1957-1962).

  • The 16th Finance Commission (2023-2028) is chaired by Shri Arvind Panagariya.