With reference to Union Finance Commission, which of the following statement/s is/are correct?
(1) Finance Commission has a Chairman and six members.
(2) It submits its report to the NITI Aayog.
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Question

With reference to Union Finance Commission, which of the following statement/s is/are correct?
(1) Finance Commission has a Chairman and six members.
(2) It submits its report to the NITI Aayog.
Select the correct answer using the code given below –

UnlockIAS · Accepted Answer

Correct — B, Neither 1 nor 2. Under Article 280, the Finance Commission consists of a Chairman and four other members (five in all), not 'a Chairman and six members', so statement 1 is wrong. And the Commission submits its report to the President of India, who then causes it to be laid before each House of Parliament (Article 281) — it does not report to the NITI Aayog, so statement 2 is also wrong. Since both statements are incorrect, the answer is 'Neither 1 nor 2'.

Why the other options are wrong — (a) Statement 2 is false — the Finance Commission reports to the President of India, not to the NITI Aayog (an executive think-tank that plays no role in receiving the FC's report).  (c) Both statements are wrong, so this is doubly incorrect: the FC has a Chairman plus 4 members (not 6) and it reports to the President, not the NITI Aayog.  (d) Statement 1 is false — the FC's composition is a Chairman and four other members (total five), not 'a Chairman and six members'.

Concept: The Finance Commission is a constitutional body under Article 280, constituted by the President normally every fifth year, to recommend the distribution of tax revenues between the Centre and the States (vertical and horizontal devolution) and the principles governing grants-in-aid. It consists of a Chairman and four other members appointed by the President; their qualifications are fixed by Parliament under the Finance Commission Act, 1951.

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