Finance Commission of India

Finance Commission of India
Definition

The Finance Commission constituted by the President pursuant to clause (1) of article 280 of the Constitution.

It was formed to define the financial relations between the centre and the state. The Finance Commission Act of 1951 states the terms of qualification, appointment and disqualification, the term, eligibility and powers of the Finance Commission. As per the Constitution, the commission is appointed every five years and consists of a chairman and four other members.

Qualifications for appointment as, and the manner of selection of, members of the  commission.



The Chairman of the Commission shall be selected from among persons who have had experience in public affairs, and the four other members shall be selected from among persons who—

(a) are, or have been, or are qualified to be appointed as Judges of a High Court; or

(b) have special knowledge of the finances and accounts of Government; or

(c) have had wide experience in financial matters and in administration; or

(d) have special knowledge of economics.


Functions

Functions of the Finance Commission can be explicitly stated as:

1.    Distribution of net proceeds of taxes between Centre and the States, to be divided as per their respective contributions to the taxes.

2.    Determine factors governing Grants-in Aid to the states and the magnitude of the same.

3.    Work with the State Finance Commissions and suggest measures to augment the Consolidated Fund of the States so as to provide additional resources to Panchayats and Municipalities in the state.

Finance Commission appointed so far

So far 13 Finance Commissions have been appointed which are as follows:

Finance Commission    Year of Establishment       Chairman       Operational Duration

   First                             1951                           K.C Neogy             1952-57

Second                           1956                        K.Santhanam              1957-62

Third                              1960                        A.K. Chanda              1962-66

Fourth                            1964                     P.V. Rajamannarr           1966-69

Fifth                               1968                     Mahaveer Tyagi             1969-74

Sixth                               1972        K. Brahmananda Reddy             1974-79

Seventh                          1977                     J.M. Shellet                   1979-84

Eighth                             1983                  Y. B. Chavan                   1984-89

Ninth                              1987                  N.K.P. Salve                   1989-95

Tenth                              1992                       K.C Pant                1995-2000

Eleventh                         1998               A.M.Khusro                   2000-2005

Twelfth                           2003             C.Rangarajan                   2005-2010

Thirteenth                       2007               Vijay l kelkar                  2010-2015