Multiple choice

The Finance Commission is primarily concerned with recommending to the President about

  1. the principle governing grants in aid to be given to the states

  2. distributing the net proceeds of the taxes between the centre and the states

  3. neither (A) nor (B)

  4. both (A) and (B)
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The Finance Commission, under Article 280, recommends both the principles governing grants-in-aid to states (distributing central funds to needy states) and the distribution of net tax proceeds between the Centre and states (vertical devolution). Both these functions are core to its mandate of fiscal federalism.

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