Finance Commission is constituted to define financial relations between the Center and the States. Under the provision of Article 280 of the constitution, the President appoints a Financial Commission for the specific purpose of devolution of non-plan revenues resources. The functions of the commission are to make recommendations to the President in respect of:
Functions Of The Finance Commission
- The distribution of net proceeds of taxes between the Union and the States.
- To evaluate the increase in the Consolidated Fund of a state to affix the resources of the Panchayat in the state.
- To evaluate the increase in the Consolidated Fund of a state to affix the resources of the Municipalities in the state.
Implementation Of The Recommendation Of Finance Commission
Powers of the Commission:
- The Commission shall have all the powers of the Civil Court as per the Code of Civil Procedure, 1908.
- It can call any witness, or can ask for the production of any public record or document from any court or office.
- It can ask any person to give information or document on matters as it may feel to be useful or relevant.
- It can function as a civil court in discharging its duties.
Qualifications for appointment and the manner of selection:
- The Chairman of the Finance Commission is selected among persons who have had the experience of public affairs, and four other members are selected among persons who are, or have been, or are qualified as judges of High Court, or
- Have knowledge of finance, or
- Have vast experience in financial matters and are in administration, or
- Have knowledge of economics
Term of Office of the members:
Conditions of service and salaries and allowance of members:
- Each member should provide whole time or part time service to the Commission as the President with respect to each case might specify.
- Each member shall receive salaries according to the provisions made by the central government.
A member may be disqualified if:
- He is of unsound mind.
- He is involved in a vile act.
- If his interests are likely to affect the smooth functioning of the Commission.
Read Also: Planning Commission
In above context so far 11 Financial Commissions have been appointed which are as follows:
|Finance Commission||Year of Establishment||Chairman||Operational Duration||Year of Submitting Report|
|II||1956||K. Santhanam||1957-1962||1956* and 1957|
|III||1960||A. K. Chanda||1962-1966||1961|
|IV||1964||P. V. Rajamannar||1966-1969||1965|
|V||1968||Mahavir Tyagi||1969-1974||1968* and 1969|
|VI||1972||Brahma Nand Reddy||1974-1979||1973|
|VII||1977||J. M. Shellet||1979-1984||1978|
|VIII||1983||Y.V. Chawan||1984-1989||1983* and 1984|
|X||1992||K.C. Pant||1995-2000||Nov 26, 1994|
|XI||1998||A.M. Khusro||2000-2005||Jan 15, 2000*; July 7, 2000 and Aug 31, 2000|
|XII||2003||C. Rangarajan||2005-2010||Nov 30, 2004|
|XIII||2007||Vijay L. Kelkar||2010-2015||Constitued in Nov 2007|
* Interim Report