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Q14 (NDA-I/2009) Polity & Governance › Constitutional & Statutory Bodies › Finance Commission of India Answer Verified

Which of the foil!owing is/are the function/ functions of the Finance Commission of India? 1. Making recommendations as to the principles governing grant-in-aid of the revenues of the States. 2. To suggest measures to augment Consolidated Fund of India. Select the correct answer using the code given below :

Result
Your answer: —  Â·  Correct: A
Explanation

Under Article 280 of the Constitution, the Finance Commission is mandated to recommend the principles governing grants-in-aid of the revenues of the States out of the Consolidated Fund of India [c1, c3, t5]. This confirms Statement 1 is a core function. Regarding Statement 2, the Commission's constitutional duty is to suggest measures to augment the Consolidated Fund of a State to supplement the resources of local bodies (Panchayats and Municipalities) based on State Finance Commission recommendations [c5, t1, t7]. It does not have a mandate to suggest measures to augment the Consolidated Fund of India itself; rather, it recommends the distribution of proceeds from that fund. Therefore, Statement 2 is technically incorrect as it misidentifies the specific fund (State vs. India) intended for augmentation in this context. Consequently, only the first statement is correct.

Sources

  1. [1] Laxmikanth, M. Indian Polity. 7th ed., McGraw Hill. > Chapter 46: Finance Commission > FUNCTIONS > p. 431
  2. [2] Laxmikanth, M. Indian Polity. 7th ed., McGraw Hill. > Chapter 15: Centre State Relations > I I Finance Commission > p. 156
  3. [3] Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 4: Government Budgeting > 1. Finance Commission Grants > p. 182
  4. [4] https://www.hansrajcollege.ac.in/hCPanel/uploads/elearning/elearning_document/G_E_Public_Finance,_B_Com_(H)_4th_Sem-Part-B-Unit-1-14th_Finance_Commission_Report-_Chapter-14th.pdf
  5. [5] https://fincomindia.nic.in/about-us
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SIMILAR QUESTIONS

IAS · 2003 · Q73 Relevance score: 2.21

Consider the following statements: The function (S) of the Finance Commission is/are 1. to allow the withdrawal of money out of the Consolidated Fund of India. 2. to allocate between the States the shares of proceeds of taxes. 3. to consider applications for grants-in-aid from States. 4. to supervise and report on whether the Union and State governments are levying taxes in accordance with the budgetary provisions. Which of these statements is/are correct?

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The primary function of the Finance Commission in India is to

CAPF · 2010 · Q74 Relevance score: 0.64

Statement I : The Finance Commission makes principles which govern the grants-in- aid of revenues given to the States out of the Consolidated Fund of India. Statement II Members of the Finance Commission are drawn from all the States and Union Territories.

IAS · 2012 · Q58 Relevance score: -0.03

Which of the following is/are among the noticeable feature of the recommendations of the Thirteenth Finance Commission? 1. A design for the Goods and Services Tax, and a compensation package linked to adherence to the proposed design 2. A design for the creation of lakhs of jobs in the next ten years in consonance with India’s demographic dividend 3. Devolution of a specified share of central taxes to local bodies as grants Select the correct answer using the codes given below:

IAS · 2002 · Q80 Relevance score: -0.15

Which one of the following authorities recommends the principles governing the grants-in-aid of the revenues to the states out of the Consolidated Fund of India?