The correct answer is option 2, the Finance Commission. The Finance Commission is a constitutional body that is responsible for the distribution of revenues between the Central and State governments in India. This commission is appointed every five years and its main function is to recommend the sharing of taxes, grants-in-aid, and other financial resources between the Centre and the States.

Let`s dissect the other options to understand why they are not the correct answer. Option 1, the Planning Commission, was responsible for formulating and implementing five-year plans in India, but it was abolished in 2014. Option 3, the Inter-State Council, is a body for cooperation among the states, but it does not play a direct role in revenue distribution. Option 4, the National Development Council, is a platform for dialogue between the Centre and the States on matters of national importance, but it does not have the authority to distribute revenues.

Therefore, the Finance Commission is the only correct answer as it is specifically tasked with the vital function of distributing revenues between the Centre and the States.