polity medium true/false

The Finance Commission is a constitutional body constituted every 5 years to recommend distribution of tax revenues between Centre and States.

  1. True
  2. False

Answer: True

Article 280: President constitutes Finance Commission every 5 years (or earlier) comprising Chairman + 4 members. Recommendations cover: (a) tax devolution between Centre-States, (b) grants-in-aid to States, (c) augmenting State Panchayat/Municipality funds. 15th FC (2020-25) recommended 41% vertical devolution to States.

Topic Federal Relations - Finance Commission
Exam Relevance Fiscal federalism institution question for UPSC, SSC, and Banking exams

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