Question

Consider the following statements:

The function(*) of the Finance commission is/are:

1. to allow the withdrawal of the money out of the Consolidated Fund of India

2. to allocate between the States the shares of proceeds of taxes

3. to consider applications for grants-in-aid from States

4. to supervise and report on whether the Union and State governments are levying taxes in accordance with the budgetary provisions

Which of these statements is/are correct?

(a) Only 1 (b) 2 and 3 (c) 3 and 4 (d) 1, 2 and 4

Answer 1

(b) Article 280 of the Constitution of India provides for a Finance Commission as a quasi-judicial body. It is constituted by the President of India every fifth year or at such earlier time as he considers necessary. The commission makes recommendations to the president with regard to the distribution of the proceeds of taxes between the union and the states. The principles which should govern the grants-in-aid to be given to the states. Any other matter referred to the Commission by the President in the interest of sound finance.