Finance Commission is set up in every five years mainly to 1 examine whether the state and Cen...........

Indian Polity Constitutional Bodies

Finance Commission is set up in every five years mainly to

1. examine whether the state and Central government fulfills the budgetary promises.

2. make recommendations to the central government for fiscal discipline.

3. decide on principles and procedures guiding the allocation of funds to States.

4. suggest measures to prevent money laundering.

1 only

2 only

3 only

4 only

Finance Commission is set up mainly to investigate and study about the financial relation between the centre and the states.

It is the duty of the Finance Commission to make recommendations to the President as to:

• the distribution of net proceeds of taxes between the Union and the States

• the principles which should govern the grants-in-aid

• the measures needed to augment the Consolidated Fund of a State to supplement the resources of local self government.

• any other matter referred to the Commission by the President in the interests of sound finance.

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