Question

Consider the following statements regarding the composition of the Finance Commission:

1. It consists of a chairman and four other members.

2. Members are appointed by the Prime Minister.

3. The qualifications of members are determined by Parliament.

Which of these statements is/are correct?

• A. 1 and 3
• B. 1 only
• C. 2 and 3
• D. 1, 2, and 3

Answer 1

Answer:

A. 1 and 3

Finance Commission of India: Composition and Appointments

• The Finance Commission is a constitutional body constituted under Article 280 of the Constitution of India.
• Composition: The Finance Commission consists of a Chairman and four other members. This means a total of five members.
• Appointment of Members: Members of the Finance Commission, including the Chairman, are appointed by the President of India, not the Prime Minister.
• Qualifications of Members: The Constitution states that Parliament may by law determine the qualifications for appointment of members. The Parliament has enacted the Finance Commission (Miscellaneous Provisions) Act, 1951, which lays down the qualifications.
• The Chairman should be a person having experience of public affairs.
• The other four members should be:
  • A High Court Judge or qualified to be appointed as such.
  • A person with specialized knowledge of finance and accounts of the government.
  • A person with wide experience in financial matters and public administration.
  • A person with deep knowledge of economics.
• Tenure and Reappointment: The term of office and other conditions of service of the members are determined by the President. They are eligible for reappointment.
• Functions: The Finance Commission makes recommendations to the President regarding the distribution of net proceeds of taxes between the Union and the States and the allocation of the same between the States, and other financial matters.