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Question 1 of 5 · Centre-State Relations & Emergency Provisions
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The Finance Commission is constituted by the President of India under which Article?

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Answer: Option C — Article 280

Detailed Solution

The Finance Commission is a constitutional body that recommends how tax revenues should be shared between the Union and the states. Under Article 280, the President must constitute a Finance Commission every five years, or earlier if needed.

The Commission has a Chairman and four other members, appointed by the President. Parliament has laid down their qualifications in the Finance Commission (Miscellaneous Provisions) Act, 1951. The Chairman must be a person with experience in public affairs, and the members are chosen from people who are, or are qualified to be, High Court judges, or who have special knowledge of government finance, finance and accounts, or economics.

The Commission makes recommendations to the President on:

  • The distribution of the net proceeds of taxes between the Centre and the states (vertical devolution), and among the states (horizontal devolution).
  • The principles governing grants-in-aid to the states out of the Consolidated Fund of India (Article 275).
  • Measures to increase the funds of states to support panchayats and municipalities.
  • Any other matter referred to it by the President.

Its recommendations are advisory, not binding. The President places the report and an explanatory memorandum before both Houses of Parliament.

The First Finance Commission was set up in 1951 under K.C. Neogy. The 15th Finance Commission, chaired by N.K. Singh, recommended a 41% share of the divisible pool of central taxes for the states for 2021-26. The 16th Finance Commission, chaired by Arvind Panagariya, was constituted on 31 December 2023 to cover the period 2026-31.

Why not the other options?

  • ✗Article 265 says that no tax can be levied or collected except by the authority of law.
  • ✗Article 312 deals with the All India Services.
  • ✗Article 324 deals with the Election Commission.

Quick tip

Remember: Finance Commission = Article 280, every 5 years, Chairman + 4 members; 1st K.C. Neogy (1951), 15th N.K. Singh (41% share), 16th Arvind Panagariya.

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Centre-State Relations & Emergency Provisions — Preparation

This question tests your understanding of Centre-State Relations & Emergency Provisions, a key topic in the General Knowledge section. The detailed solution above uses a step-by-step approach to show the reasoning, and where available, a shortcut that helps you solve similar questions in under 90 seconds during the actual exam.

This topic covers the distribution of legislative, administrative and financial powers between the Centre and the states, the Union, State and Concurrent Lists, inter-state councils and zonal councils, and the three types of emergency: national emergency (Article 352), President's rule (Article 356) and financial emergency (Article 360). Exams ask which list a subject falls in, which commission examined Centre-state relations (the Sarkaria and Punchhi Commissions), and how often each type of emergency has been declared. Remember that a financial emergency has never been declared in India, and that 'armed rebellion' replaced 'internal disturbance' as a ground for national emergency through the 44th Amendment. Practise the Centre-state relations and emergency provisions questions below, written in the style of the general awareness sections of exams such as SSC, banking, railways, CUET GAT, MAH CET and CLAT. Each question comes with a detailed explanation that adds related facts, so every question helps you revise more than one point.

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