The finance commission of India is required to make recommendations to the __________.

The correct answer is President of India.Key Points

• The Finance Commissions are commissions periodically constituted by the President of India under Article 280 of the Indian Constitution to define the financial relations between the central government of India and the individual state governments.
  • Its core responsibility is to:
    • Evaluate the state of finances of the Union and State Governments
    • Recommend the sharing of taxes between them
    • Lay down the principles determining the distribution of these taxes among States.
• The Finance Commission is required to make recommendations to the President of India.​

Additional Information

• Functions of the Finance Commission:
  • The distribution of the net proceeds of taxes to be shared between the Centre and the states, and the allocation between the states of the respective shares of such proceeds.
  • The principles that should govern the grants-in-aid to the states by the Centre (i.e. out of the consolidated fund of India).
  • The measures needed to augment the consolidated fund of a state to supplement the resources of the panchayats and the municipalities in the state on the basis of the recommendations made by the state finance commission.
  • Any other matter referred to it by the president in the interests of sound finance.
• Composition of the Finance commission:
  • The Finance Commission consists of a chairman and four other members to be appointed by the President.
  • They hold office for five years as specified by the president in his order. They are eligible for reappointment.
  • The Constitution authorise the Parliament to determine the qualifications of members of the commission and the manner in which they should be selected.
  • Accordingly, the Parliament has specified the qualifications of the chairman and members of the commission.
    • The chairman should be a person having experience in public affairs.
    • The four other members should be selected from amongst the following:
      • A judge of a high court or one qualified to be appointed as one.
      • A person who has specialized knowledge of finance and accounts of the government.
      • A person who has wide experience in financial matters and in administration.
      • A person who has special knowledge of economics.