INDIAN FINANCE COMMISSION

   Indian finance commission

Introduction

In all federations some degree of vertical fiscal imbalance exists. This is the case with india too. As given earlier in this chapter,the framers od our constitution anticipated that the state will be in deficits,while the union Government will have the surplus in its budgets.So under Article 280,a provision was made for the appointment of a finance commission by the President at an interval of five years or earlier to make recommendations pertaining to the sharing of income and excise taxes and grants-in-aid of state revenues.it is a quasi-judicial body whose recommendations, once accepted by the government, become binding on it. Further, the institution of the finance commission is a unique features of our Constitution. It has no parallel in any other federation,old or new. The Australian grants commission resembles our finance commission to some extent.but there are important differences between the two.the former is a permanent body and deals with grants only one annual basis; the latter is and adhoc body which ceases to exist once it makes its recommendations but has wider powers as both tax-sharing And grants-in-aid come under its purview.its awards remain in operation for five years.