Economics • Indian EconomyMedium
What is the primary mandate and function of the Finance Commission of India constituted under Article two hundred eighty of the Constitution?
A. To recommend the principles governing the distribution of net tax proceeds between the Union and the States, and inter se allocation among the States✓ Correct Answer
B. To audit the expenditure accounts of all central government ministries and public sector undertakings
C. To formulate the five-year economic development plans and allocate capital grants to state governments
D. To determine minimum support prices for major agricultural crops produced across different states
💡 Solution & Explanation
Article two hundred eighty provides for establishing a Finance Commission every five years to recommend the vertical devolution of tax revenues between the center and states as well as horizontal distribution among individual states. Government expenditure auditing is constitutionally vested in the Comptroller and Auditor General. Five-year planning was historically overseen by the Planning Commission and later NITI Aayog. Minimum support prices are recommended by the Commission for Agricultural Costs and Prices.
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