With reference to the Finance Commission of India, consider the following statements

The Finance Commission is a statutory body
The Finance Commission was set up under Article 280 of the Constitution
The recommendations made by the Finance Commission are only advisory in nature.
The first Finance Commission was set up in 1950.

Which of the above statements are correct?

Question

With reference to the Finance Commission of India, consider the following statements

The Finance Commission is a statutory body
The Finance Commission was set up under Article 280 of the Constitution
The recommendations made by the Finance Commission are only advisory in nature.
The first Finance Commission was set up in 1950.

Which of the above statements are correct?

Accepted Answer

2 and 3 only

Explanation: The Finance Commission is a constitutional body (not statutory), established under Article 280 to recommend distribution of tax revenues between Centre and States. Statement 1 is Incorrect: Finance Commission is a constitutional body under Article 280, not a statutory body created by an Act of Parliament. Statement 2 is Correct: Article 280 of the Constitution mandates the establishment of the Finance Commission every five years. Statement 3 is Correct: Recommendations are advisory in nature; the President tables them before Parliament with an action-taken report. Statement 4 is Incorrect: The first Finance Commission was constituted in November 1951 under Chairman K.C. Neogy, not in 1950. Therefore, only statements 2 and 3 are correct, making Option 3 the correct answer.

Detailed Explanation:

Question 4 of 5 Finance Commission

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