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Finance Commission of India:

Finance Commission of India
1. Article 280 provides for the appointment of a Finance Commission at five year intervals.
2. The Finance Commission is appointed by the President and consists of a chairman and four other members.
3. The First Finance Commission was constituted vide Presidential Order dated 22.11.1951 under the chairmanship of Shri K.C. Neogy on 6th April, 1952.
4. Fourteen Finance Commissions have been appointed so far at intervals of every five years.
5. The Fourteenth Finance Commission has been set up under the Chairmanship of Dr. Y.V.Reddy (Former Governor Reserve Bank of India).
6. The Fourteenth Finance is required to give its report by 31st October, 2014. Its recommendations will cover the five year period commencing from 1st April, 2015.

Functions of Finance Commission
It is the duty of the Commission to make recommendations to the President as to:
1. the distribution between the Union and the States of the net proceeds of taxes which are to be, or may be, divided between them and the allocation between the States of the respective shares of such proceeds;
2. the principles which should govern the grants-in-aid of the revenues of the States out of the Consolidated Fund of India;
3. the measures needed to augment the Consolidated Fund of a State to supplement the resources of the Panchayats in the State on the basis of the recommendations made by the Finance Commission of the State;
4. the measures needed to augment the Consolidated Fund of a State to supplement the resources of the Municipalities in the State on the basis of the recommendations made by the Finance Commission of the State;
5. any other matter referred to the Commission by the President in the interests of sound finance.

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