The Finance Commission of India was established by the Government of India in 1951 under Article 280 of the Indian Constitution. The purpose of the Finance Commission is to make recommendations to the President of India on the distribution of tax revenues between the central government and the state governments, as well as the principles that should govern the grants-in-aid of revenues from the central government to the state governments.
Since its establishment, the Finance Commission has played a critical role in promoting fiscal federalism in India and ensuring that resources are allocated fairly and efficiently across different levels of government. The Commission is typically appointed every five years and consists of a chairman and four other members, who are experts in fields such as economics, public finance, and taxation.
The Finance Commission has been instrumental in driving many key fiscal reforms in India over the years, including the introduction of Goods and Services Tax (GST) and the implementation of the Fiscal Responsibility and Budget Management Act. Its recommendations play a critical role in shaping the fiscal policies of both the central and state governments, and have a significant impact on the overall development and economic growth of the country.
