RAS question
The Finance Commission is constituted under:
Correct answer: (A) Article 280.
The Finance Commission is constituted under Article 280 of the Constitution of India.
Explanation
Article 280 is the direct constitutional basis for the Finance Commission. It requires the President to constitute the Commission within two years from the commencement of the Constitution and thereafter every fifth year, or earlier if the President considers it necessary. The same article also fixes its basic composition: a Chairman and four other members appointed by the President. Its work explains why the provision is central to fiscal federalism: the Commission recommends how the net proceeds of taxes should be distributed between the Union and the States, how States' shares should be allocated, and what principles should govern grants-in-aid from the Consolidated Fund of India.
Why the other options are wrong
- (B) Article 281 deals with placing the Finance Commission's recommendations, along with an explanatory memorandum on action taken, before each House of Parliament; it does not constitute the Commission.
- (C) Article 275 concerns grants from the Union to certain States, including grants-in-aid charged on the Consolidated Fund of India, not the creation of the Finance Commission.
- (D) Article 270 deals with taxes levied and collected by the Union and distributed between the Union and the States, whereas the Commission itself is constituted under Article 280.
Concept
This tests the constitutional machinery of fiscal federalism, especially how Centre-State financial relations are institutionalised. RAS repeatedly asks such article-based questions because they link polity facts with public finance and governance.