Shree Capital Rahul Nayar

According to rahul nayar the Finance Commission of India came into existence in 1951. The Finance commission is established under article 280 of the Indian Constitution of India by the President of India. The Indian Finance Commission Act was passed to give a structured format to the Finance Commission of India as per the world standard. The need for the Finance Commission was felt by the British for guiding the finance of India. The structure of the modern Act was laid in the early 1920's. The Finance Commission is formed to define the financial relations between the centre and the state. The Finance Commission Act of 1951 tells about the qualification, appointment, term, eligibility, disqualification, powers etc of the Finance Commission.

Functions Of The Finance Commission
The Finance Commission's duty is to recommend to the President as to-

• The distribution of net proceeds of taxes between the Union and the States.
• To evaluate the increase in the Consolidated Fund of a state to affix the resources of the Panchayat in the state.
• To evaluate the increase in the Consolidated Fund of a state to affix the resources of the Municipalities in the state.