Who among the following determines the qualification which shall be requisite for appointment as member of the finance commission?

Question

UnlockIAS · Accepted Answer

Correct — C, Parliament by act. The stem is lifted almost word for word from the clause that answers it. Article 280(2) reads: "Parliament may by law determine the qualifications which shall be requisite for appointment as members of the Commission and the manner in which they shall be selected." The phrase "which shall be requisite" in the question is the constitutional phrase, and it belongs to Parliament's clause, not the President's. Parliament in fact exercised that power at the earliest opportunity, through the Finance Commission (Miscellaneous Provisions) Act, 1951. Section 3 of that Act is the qualification list still in force: the Chairman is chosen from persons who have had experience in public affairs, and the four other members from persons who are, have been or are qualified to be appointed as a Judge of a High Court, or have special knowledge of the finances and accounts of Government, or have had wide experience in financial matters and in administration, or have special knowledge of economics. Article 280 is deliberately split between two authorities and the question is built on that split. Clause (1) is the President's: he constitutes the Commission by order, within two years of the Constitution's commencement and thereafter at the expiration of every fifth year or at such earlier time as he considers necessary, and he appoints the Chairman and the four other members. Clause (2) is Parliament's: it fixes who is eligible to be appointed and how they are to be selected. Clause (4) is Parliament's again — the Commission determines its own procedure but has such powers in the performance of its functions as Parliament may by law confer, and the 1951 Act supplies them, including the powers of a civil court to summon witnesses and require the production of documents. So the President appoints; Parliament sets the bar the appointee must clear. On the date of this exam, 13 September 2025, the body concerned was the Sixteenth Finance Commission, constituted on 31 December 2023 under Arvind Panagariya for the award period 2026–31, its members appointed by the President and qualified under a statute enacted seventy-four years earlier.

Why the other options are wrong — (a) The strongest wrong answer, because the President really does hold most of the visible powers here: he constitutes the Commission by order under Article 280(1), decides whether to do so earlier than the five-year point, appoints the Chairman and all four members, refers additional terms under Article 280(3)(d) in the interests of sound finance, and lays every recommendation with an action-taken memorandum before each House under Article 281. What he does not do is prescribe the qualifications, because clause (2) hands that to Parliament. The generalisation that traps candidates comes from elsewhere in the Constitution — Article 318 does let the President determine, by regulation, the number of members of the Union Public Service Commission and their conditions of service. Read the specific Article rather than the pattern.  (b) The Council of Ministers has no independent constitutional role in Article 280 at all. Under Article 74(1) it aids and advises the President, and in practice its advice is what moves him to constitute a Commission and to settle its terms of reference — but advice is not law. Clause (2) requires a determination "by law", which means a Bill passed by both Houses and assented to under Article 111. An executive body cannot supply that however senior it is, and a candidate who marks (b) has confused the source of the political decision with the source of the legal power.  (d) The Cabinet does in practice decide when a Finance Commission is set up, who is proposed to chair it and what extra questions are referred to it — which is exactly why the option is offered. But a Cabinet decision is an executive act, not an enactment, and it cannot satisfy a clause that says "Parliament may by law determine". It is worth remembering how thin the Cabinet's own constitutional footing is: the word "Cabinet" appears in the Constitution only in Article 352(3), inserted by the Forty-fourth Amendment, 1978, which requires the written recommendation of the Union Cabinet before a Proclamation of Emergency is issued.

Concept: The Finance Commission is the constitutional balancing wheel of Indian fiscal federalism, created by Article 280 in the Finance chapter of Part XII. The design problem it solves is structural: the Union collects the most buoyant taxes while the States carry the heaviest expenditure responsibilities, so a neutral body has to periodically recommend how the money moves. Article 280 allots its four clauses to different authorities. Clause (1) empowers the President to constitute the Commission by order — within two years of commencement and thereafter every fifth year or earlier if he considers it necessary — consisting of a Chairman and four other members appointed by him. Clause (2) empowers Parliament, by law, to determine the qualifications for appointment and the manner of selection. Clause (3) sets out the duties: to recommend the distribution between the Union and the States of the net proceeds of divisible taxes and the allocation of the States' shares among themselves; the principles governing grants-in-aid to the States out of the Consolidated Fund of India; the measures needed to augment a State's Consolidated Fund to supplement the resources of its Panchayats and Municipalities — clauses (3)(bb) and (3)(c), inserted by the Seventy-third and Seventy-fourth Amendments of 1992 — and any other matter referred by the President in the interests of sound finance. Clause (4) lets the Commission determine its own procedure while giving Parliament the power to confer powers on it. Article 281 completes the accountability loop by requiring the President to lay every recommendation, with an explanatory memorandum on the action taken, before each House. The recommendations themselves are advisory, not binding; only the laying is compulsory. Exactly the same architecture is repeated one tier down: Article 243-I has the Governor constitute a State Finance Commission for the Panchayats, and Article 243-I(2) has the State Legislature by law provide for its composition, the qualifications of its members and the manner of their selection.

State PCS 2025 Q64 — Polity & Governance PYQ with Answer

State PCS 2025 Q64 — Polity & Governance PYQ with Answer