Economics • Indian EconomyMedium
What is the statutory role and mandate of the Finance Commission of India as constituted under Article 280 of the Constitution?
A. Recommending the principles governing the distribution of net tax proceeds between the union and states, and vertical and horizontal tax devolution✓ Correct Answer
B. Setting daily retail prices for petroleum products and natural gas across state borders
C. Auditing annual financial statements of all registered political parties
D. Determining minimum wages for industrial workers in special economic zones
💡 Solution & Explanation
The Finance Commission is a constitutional body set up every five years by the President under Article 280 to recommend how tax revenues should be shared between the central government and state governments to address fiscal imbalances. Petroleum pricing is deregulated and determined by market-linked refinery costs. Statutory auditing of public accounts is handled separately by the Comptroller and Auditor General.
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