The Finance Commission is established under which Article of the Indian Constitution?
- (a)280
- (b)268
- (c)246
- (d)365
Answer
Why
Correct — A. Article 280 provides for the Finance Commission.
It directs the President to constitute one every fifth year, or earlier if the President considers it necessary, with a chairman and four other members.
Article 281 then has the President lay its recommendations before each House of Parliament.
Article 280 → option (a).
Why the others are wrong
- (b)268 — Article 268 covers duties levied by the Union but collected and appropriated by the States, such as certain stamp duties. It sits in the same finance chapter, which is why it looks close.
- (c)246 — Article 246 divides law-making power between Parliament and the State legislatures through the Union, State and Concurrent Lists of the Seventh Schedule. It sets up no commission.
- (d)365 — Article 365 deals with a State's failure to comply with Union directions. The President may then hold that the State's government cannot be carried on in accordance with the Constitution.
Concept
The Finance Commission is a constitutional body under Article 280, constituted by the President's order.
It recommends how the net proceeds of shareable taxes are divided between the Union and the States, and how the States' share is allocated among them. It also recommends the principles for grants-in-aid to States from the Consolidated Fund of India.
Parliament sets members' qualifications by law, in the Finance Commission (Miscellaneous Provisions) Act, 1951.
All four numbers are real articles, so you cannot eliminate by asking whether an article exists. You need what each one does: 268 is a tax-collection rule, 246 the legislative lists, 365 the consequence of defying Union directions.
Key facts
- Article 280: the President constitutes a Finance Commission every fifth year or earlier, with a chairman and four other members.
- Article 281: every recommendation is laid before each House of Parliament with an explanatory memorandum on the action taken.
- The first Finance Commission was set up in 1951, chaired by K. C. Neogy.
- The 16th Finance Commission, chaired by Arvind Panagariya, was constituted on 31 December 2023 for the award period 2026-31.
Study next
Common traps
- Picking Article 268 because it sits in the same finance chapter: it governs who collects certain duties, not the Commission.
- Thinking Parliament constitutes the Commission: the President does, by order, and Parliament only sets qualifications by law.
19 Sep 2025, 09:00, GA Q.15 asks whether the Commission's recommendations bind, keyed advisory, not legally binding. This item asks for the article that creates it.
Related PYQs
No directly related past PYQ was found.