Finance Commission of India

E25505

The Finance Commission of India is a constitutional body that recommends how tax revenues should be shared between the central government and the states, helping shape the country’s fiscal federalism.

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Statements (49)

Predicate Object
instanceOf advisory body
constitutional body
appointmentBy President of India
composition Chairman
four other members
constitutionalArticle Article 280 of the Constitution of India
country India
establishedBy Constitution of India
firstConstitutedIn 1951
foundationalLaw Finance Commission (Miscellaneous Provisions) Act, 1951
governedByPrinciple efficiency in resource use
equity among States
incentives for fiscal discipline
need-based transfers
hasAuthorityOver State Governments of India
surface form: State governments of India

Union Government
surface form: Union government of India
headquartersLocation New Delhi, India
surface form: New Delhi
jurisdiction Government of India
legalStatus quasi-judicial body
natureOfRecommendations advisory
playsRoleIn Centre-State financial relations
design of intergovernmental transfers in India
fiscal decentralization in India
purpose address horizontal imbalances among States
address vertical imbalances between Union and States
promote fiscal federalism in India
recommend distribution of tax revenues between Union and States
recommend principles governing grants-in-aid of the revenues of the States
recommendationType grants-in-aid
measures to augment Consolidated Fund of a State
measures to augment resources of Municipalities
measures to augment resources of Panchayats
tax devolution
relatedConcept fiscal federalism in India
relatedTo Consolidated Fund of India
Consolidated Fund of India
surface form: Consolidated Fund of a State in India
reportFrequency every five years
reportsImplementedBy State Governments of India
surface form: State governments of India

Union Government
surface form: Union government of India
scope allocation of shares of States in the net proceeds of taxes
distribution of net proceeds of taxes between Union and States
principles governing grants-in-aid from Consolidated Fund of India
recommendations on fiscal consolidation
review of state finances
submitsReportTo President of India
worksOn disaster management grants
revenue deficit grants
sector-specific grants
tax sharing formula

Referenced by (1)

Full triples — surface form annotated when it differs from this entity's canonical label.

Government of India includesBody Finance Commission of India