How Many Finance Commissions in India

Introduction

Fifteen finance commissions have been established in India. Dr. B.R. Ambedkar, the then-current law minister, established the Finance Commission in 1951 to address these imbalances. India is a federal country that experiences both vertical and horizontal fiscal imbalances. States incurring expenses that are out of proportion to their revenue sources while carrying out their duties causes vertical imbalances between the federal and state governments.

Roles of finance commision

• A chairman and four additional members of the Finance Commission are chosen by the Indian president. They hold office for however long the president specifies in his order. They could possibly get reappointed.

• The Finance Commission suggests a general framework for the grant-in-aid of state governments by the Consolidated Fund of India. The report of the commission is given to the president.

• The planning commission's responsibility is to allocate resources between the centre and the states, while the finance commission's role is to recommend how net tax revenues should be split between the union and the states. The interstate council is in charge of state coordination and cooperation. The Planning Commission is now run by "NITI AAYOG" (National Institution for Transforming India).

• The union's and the states' respective powers are divided according to the seventh schedule of the constitution. Three sub-lists follow this:

1. Union list

2. State list

3. Concurrent list

Functions of The Finance Commission

The primary duty of the Finance Commission is described in Article 280(3) of the Constitution as follows:

1. To offer suggestions regarding how the union and the states should split the tax revenue.

2. To establish the standards that will be used to determine how much money the India Consolidated Fund will give to states as aid.

3. Determine the best course of action for increasing the states' consolidated funds for the development of panchayats in each state based on the recommendations of the finance commission.

4. Any other matter that the panel is asked to consider by the president in the interest of responsible financial management. The parliament's job is to give the go-ahead for withdrawals from the consolidated fund of India. The finance ministry's responsibility is to ensure that state and federal governments are collecting taxes in accordance with the budget's requirements.

Conclusion

The constitutionally mandated Finance Commission is in charge of dividing up certain revenue sources between the Union and the State Governments.