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 –
- (a)Only 2
- (b)Neither 1 nor 2
- (c)Both 1 and 2
- (d)Only 1
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'.
- (a)Only 2 — 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 1 and 2 — 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)Only 1 — Statement 1 is false — the FC's composition is a Chairman and four other members (total five), not 'a Chairman and six members'.
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.
The question plants two plausible-sounding but wrong details — an inflated membership ('six members') and a wrong recipient ('NITI Aayog'). NITI Aayog replaced the Planning Commission in 2015 and sounds authoritative, but the FC is a constitutional body whose report goes to the President (Article 281). Knowing 'Chairman + 4 members' and 'reports to the President' defeats both traps.
- Finance Commission: constitutional body under Article 280; a Chairman and four other members (five in total).
- Constituted by the President normally every fifth year; members' qualifications set by Parliament (Finance Commission Act, 1951).
- It submits its report to the President, who lays it before both Houses of Parliament (Article 281).
- The 15th Finance Commission (chaired by N. K. Singh) covered the award period 2021-22 to 2025-26.
Both statements are incorrect, so the correct code is (b) Neither 1 nor 2.
- Assuming the FC reports to the NITI Aayog or the Ministry of Finance rather than to the President
- Misremembering the membership as 'Chairman + 6' instead of 'Chairman + 4'
UPPSC/UPSC test the FC's constitutional article, its composition, and the President's role in receiving and tabling its report — usually through statement-based questions.
Consider the following statements: The function(s) of the Finance Commission is/are 1. To allow the withdrawal of money out of the Consolidated Fund of India. 2. To allocate between the States the shares of proceeds of taxes. 3. To consider applications for grants-in-aid from States. 4. To supervise and report on whether the Union and State governments are levying taxes in accordance with the budgetary provisions. Which of these statements is/are correct?
- (a) Only 1
- (b) 2 and 3
- (c) 3 and 4
- (d) 1, 2 and 4
Answer(b) 2 and 3
Same constitutional body — tests the Finance Commission's Article 280 role (tax devolution and grants-in-aid), the flip side of this question's composition/reporting facts.
The primary function of the Finance Commission in India is to
- (a) distribute revenue between the Centre and the States
- (b) prepare the Annual Budget
- (c) advise the President on financial matters
- (d) allocate funds to various ministries of the Union and State Governments
Answer(a) distribute revenue between the Centre and the States
Directly on the Finance Commission's core mandate under Article 280 — the same body whose composition and reporting line this question tests.
- practice — not a real PYQ
Under which Article of the Constitution is the Finance Commission of India constituted?
- (a)Article 263
- (b)Article 280
- (c)Article 324
- (d)Article 356
Answer(b) Article 280 — it provides for a Finance Commission constituted by the President.
- practice — not a real PYQ
The Finance Commission of India submits its report to:
- (a)Parliament directly
- (b)the Prime Minister
- (c)the President of India
- (d)the NITI Aayog
Answer(c) the President of India — who then lays it before both Houses of Parliament.