Finance Commission is constituted by the President :

To recommend the basis of the distribution of proceeds of taxes between the Union and the States.

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To recommend the basis of which should govern the grants-in-aid for the States

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To prepare the annual finance statement

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Both A & B

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Solution

The correct option is D Both A & B
Explanation: The Finance Commission is constituted by the President under article 280 of the Constitution, mainly to give its recommendations on distribution of tax revenues between the Union and the States and amongst the States themselves.
Two distinctive features of the Commission’s work involve redressing the vertical imbalances between the taxation powers and expenditure responsibilities of the Centre and the States respectively and equalisation of all public services across the States.

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Similar questions

Q. Consider the following statements about Finance Commision :

1. It recommends the distribution of the net proceeds of taxes to be shared between the Centre and the states, and the allocation between the states of the respective shares of such proceeds.
2. It recommends the principles that should govern the grants-in-aid to the states by the Centre (i.e., out of the consolidated fund of India).
3. The recommendations made by the Finance Commission are only of advisory nature and hence, not binding on the government.

Which of the above statements is/ are correct ?

Q. The report of Finance Commission on the distribution of tax proceeds between Central and State Governments _____________.

Q. 1. No Money Bill can be introduced in the Parliament without the recommendation of the President of India.
2. The Prime Minister appoints Finance Commission for distribution of taxes between the Union and the States.
Which of the statements given above is/are correct?

Consider the following statements regarding Grants-in-Aid to the States:
1. The provision of Statutory Grants to states is made under Article 282 of constitution.
2. The provision of Discretionary Grants to states is made under Article 275 of constitution.
3. The bases of Statutory Grants are recommendations of finance commission.
Which of the above statement(s) is/are correct?

Consider the following statements:

1) The 14^th Finance Commission recommended increasing in the share of tax devolution to 42% of total divisible pool from 32% during the 13^th Finance Commission.

2) Cess and Surcharges were not made the part of the divisible pool as it would have brought down the revenue of the Central Government.

3) The 14^th Finance Commission has recommended doing away with ‘post-devolution revenue deficit grants’; which was implemented after the recommendation of 13^th Finance Commission.

Select the correct statement(s):

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