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The constitutional bodies developed by the countries are required to look after different matters such as finances, schooling, fitness etc. The Finance Commission is a constitutional organisation run by the country that helps govern the allocation of the finances and taxes properly.
At the time of India’s constitution-making, The Finance Commission was formed to secure proper contact between the States and the Central Government to allocate taxes and funds as per the necessity of the various states in the country.
Finance Commission – A brief understanding
The finance commission is a constitutional organisation that the Government of India formulates to handle and manage the finances and taxes of the country. The Finance Commission manages the financial requirements of the States and their emergency fund requirements that have to be well looked at by the Central Government. In simple words, it acts as a joining link between the Central Government and the States as a mediator for allocating the finances.
Why was the Finance Commission Formed?
After India attained its Independence from the Britishers in 1947, the Constitution of India was drafted under the able guidance of Dr B.R Ambedkar. Various bodies were set up because of the different needs of the country’s departments. The Government of India in 1950 had set up the Planning Commission with two objectives in mind. The two objectives were:
- Assuring a five-year plan for the governance of the finances and the budget execution
- Transferring the Finances to the states as per their needs and emergencies, keeping in mind the genuine needs in the overall allocation of the money to each state.
Hence the Finance Commission established in 1951 became the First Finance Commission to be formulated after India’s Independence under the constitution.
The first Finance Commission established in 1951 was the First Finance Commission to be formulated to execute the five-year budget plan and to ensure the transfer of the finances between the central government and the state was transparent and steady.
It was formulated under the order passed by The President of India. The order for the Finance Commission formulated in 1951 was passed on the 22nd of November in the year 1951.
Under the Chairmanship of Mr K.C.Neogy on the 6th of April in the year 1952, the Finance Commission of India was formed.
Why is the Finance Commission termed the Constitutional Body?
The Government of India formulated the Finance Commission under Article 280 of the Indian constitution. The finance Commission article says that the existence of the President of India holds a lot of significance as the budget can’t be passed without his consent. So, when the First Finance Commission was formulated, the President of India attended the five-year budget plan meeting to constitute the Finance Commission body. So, as per Article 280 of the Constitution of India, the President is needed to formulate the Finance Commission every five years.
How many members are parts of the Finance Commission body?
The number of members who are a part of the Finance Commission is 5. The President makes the appointment of these members of India. Four members, along with one Chairman, are part of the Finance Commission. The Government of India keeps a check on the Finance Commission and helps the organisation to deliver its duties properly. It provides all the financial support as well as the people to run the organisation smoothly.
Finance Commission List
As the Finance Commission changes every five years, so do the members and the executive. Shri K.C Neogy became the First Finance Commission Executive on the 6th of April, 1952, when the First Finance Commission was formed. The First Finance Commission Executive, Shri K.C Neogy, was also the second Finance Minister of Independent India. However, he served as the finance minister for a shorter period.
The current Finance Commission List
The 15th Finance Commission was formed in November 2017 by the President of India and is the current finance Commission of India. Mr N.K Singh heads the current Chairmanship of the 15th Finance Commission. The current head has taken charge from Dr Y V Reddy, who was the Finance Commission preceding executive of the 14th Finance Commission.
The 15th Finance Commission is expected to submit its recommendation for financial growth for the next five years. This period covers the time from the year 2020 to 2025.
Conclusion
The Finance Commission is a constitutional body formulated to see to the taxes paid by the country’s taxpayers. It maintains an equal share of the funds and the taxes between various states and union territories.
