Question

Evaluate the following statements regarding the processes and personnel of the Finance Commissions:

1. The Chairman of the Central Finance Commission must be a person qualified to be appointed as a judge of a High Court.

2. The Governor can fill a casual vacancy in the State Finance Commission, and the new member holds office for a full term.

3. Both the Central and State Finance Commissions are constituted every fifth year or at such earlier time as the President or Governor, respectively, considers necessary.

How many of the above statements are correct?

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

Answer 1

Answer:

D. None

Finance Commissions in India

• The Finance Commission is a constitutional body established under Article 280 of the Constitution of India.

• It is a quasi-federal, impartial body tasked with determining the distribution of financial resources between the Union government and the State governments.

• It also recommends the principles governing grants-in-aid to the states.

Central Finance Commission: Composition and Qualifications

• The Chairman of the Central Finance Commission is appointed by the President of India.

• While there are no specific qualifications prescribed in the Constitution for the Chairman, it is customary to appoint someone with experience in public affairs or economics.

• The Chairman is not necessarily required to be qualified to be appointed as a judge of a High Court. This requirement is for members of the Election Commission, UPSC, etc., not the Finance Commission.

• The other four members should be persons of ability, integrity, and experience in financial matters and administration.

State Finance Commissions: Powers and Functions

• Under Article 243-I and Article 243-Y of the Constitution, States are mandated to constitute a State Finance Commission.

• Similar to the Central Finance Commission, the State Finance Commission is constituted by the Governor of the State.

• The composition and qualifications of members of the State Finance Commission are determined by the respective State Legislatures.

• A casual vacancy in a State Finance Commission is filled by the Governor, but the new member typically serves for the remainder of the term, not a full fresh term.

Frequency of Constitution

• Both the Central and State Finance Commissions are generally constituted every fifth year.

• However, the President (for Central FC) or the Governor (for State FC) can constitute them earlier if deemed necessary.

Analysis of the Statements:

• Statement 1: Incorrect. There is no constitutional mandate for the Chairman of the Central Finance Commission to be qualified as a High Court judge.

• Statement 2: Incorrect. A member appointed to fill a casual vacancy in a State Finance Commission serves for the remaining period of the term, not a full new term.

• Statement 3: Correct. This statement accurately reflects the periodicity of the constitution of both Central and State Finance Commissions as per constitutional provisions.

Conclusion:

• Based on the analysis, only statement 3 is correct. Therefore, the number of correct statements is one.