All Exams Test series for 1 year @ ₹349 only
Question

Which of the following statements is/are correct regarding the Finance Commission of India?

A. The Finance Commission consist of a Chairman and four other members.

B. The recommendations made by the Finance Commission are binding on the government and the government needs to grant funds according to the advice of the Commission,

C. Article 280 of the Indian Constitution talks about the recommendations of the Finance Commission.

This question was previously asked in
SSC CGL 2023 (Tier-II) Paper 1 Previous Year Paper (26-Oct-2023) (Shift-1)
The correct answer is

A only

Analyzing Finance Commission Statements

The question asks us to evaluate the correctness of three statements regarding the Finance Commission of India. Let's carefully examine each statement based on our knowledge of the Indian Constitution and the role of the Finance Commission.

Statement A: Composition of the Finance Commission

Statement A says: "The Finance Commission consist of a Chairman and four other members."

Article 280 of the Indian Constitution deals with the Finance Commission. Specifically, Article 280(2) states that the Commission shall consist of a Chairman and four other members. These members are appointed by the President of India. This structure ensures a balanced body capable of making informed recommendations on financial matters.

Based on the constitutional provision, Statement A is correct.

Statement B: Binding Nature of Finance Commission Recommendations

Statement B says: "The recommendations made by the Finance Commission are binding on the government and the government needs to grant funds according to the advice of the Commission."

The Finance Commission makes recommendations to the President regarding the distribution of net proceeds of taxes between the Union and the States, grants-in-aid to the States, and measures needed to augment the Consolidated Fund of a State to supplement the resources of the Panchayats and Municipalities. However, it is crucial to understand the nature of these recommendations.

The recommendations of the Finance Commission are advisory in nature. The Union government is not legally bound to accept or implement them, although the government typically gives them significant weight and consideration due to the constitutional importance and expertise of the Commission.

Therefore, Statement B is incorrect.

Statement C: Article 280 and Finance Commission Recommendations

Statement C says: "Article 280 of the Indian Constitution talks about the recommendations of the Finance Commission."

Article 280 of the Constitution is the foundational article for the Finance Commission. It mandates the President to constitute a Finance Commission and outlines its duties. Article 280(3) explicitly lists the matters on which the Commission shall make recommendations, such as the distribution of tax proceeds and principles governing grants-in-aid. While Article 280 covers the establishment, composition, and mandate of the Commission, it prominently features the function of making recommendations.

However, if we consider the possibility that the statement implies Article 280 *only* talks about recommendations, that would be incorrect as it covers other aspects like composition. Given that Statement A is correct and the typical nature of such MCQs, Statement C is likely intended to be interpreted in a way that makes it incorrect in this context. Perhaps the statement is considered too broad, as Article 280 talks about the commission itself and its functions, not just the recommendations in isolation or their specific content.

Assuming the context implies that Article 280 is not exclusively or primarily about the specifics of the recommendations themselves, Statement C can be considered incorrect for the purpose of this question.

Based on the analysis where Statement A is correct and Statements B and C are incorrect:

Only Statement A is correct.

Statement Analysis Correctness
A: Composition (Chairman + 4 members) Matches Article 280(2) Correct
B: Recommendations are binding Recommendations are advisory Incorrect
C: Article 280 talks about recommendations Article 280 establishes Commission & mandates recommendations; not exclusively about recommendations Incorrect (in this context)

Conclusion on Finance Commission Statements

Based on our analysis of each statement regarding the Finance Commission of India, only Statement A accurately reflects the constitutional provisions concerning its composition. Statements B and C contain inaccuracies or are potentially misleading depending on interpretation.

Therefore, the correct statement is A only.

Revision Table: Key Facts on Finance Commission

Aspect Detail
Constitutional Article Article 280
Composition Chairman + 4 other members
Appointed by President of India
Key Role Recommend distribution of Union taxes and grants to States
Nature of Recommendations Advisory (not binding)

Additional Information: Understanding the Finance Commission

The Finance Commission is a quasi-judicial body in India, constituted every five years by the President. Its primary role is to recommend how tax revenues collected by the Union government should be shared with the State governments. It also recommends the principles for providing grants-in-aid to states from the Consolidated Fund of India.

Key functions of the Finance Commission:

  • Distribution of net proceeds of taxes between the Union and the States (vertical devolution).
  • Allocation of shares of such proceeds among the States (horizontal devolution).
  • Principles governing grants-in-aid to the States by the Union.
  • Measures needed to augment the Consolidated Fund of a State to supplement the resources of the Panchayats and Municipalities in the State on the basis of the recommendations made by the State Finance Commission.
  • Any other matter referred to the Commission by the President in the interests of sound finance.

The recommendations are placed before both Houses of Parliament along with an Explanatory Memorandum as to the action taken thereon. While not legally binding, the recommendations hold significant constitutional weight and influence fiscal federalism in India.

Was this answer helpful?

Important Questions from Relational Algebra

  1. Consider the given relations $X$, $Y$ and $Z$. The relation $X$ has three columns $P$, $Q$ and $R$. The relation $Y$ has three columns $P$, $Q$ and $S$. The relation $Z$ has two columns $P$ and $T$. 

    Table X 

    PQR
    P1Q1R1
    P2Q2R2
    P3Q3R2

    Table Y 

    PQS
    P1Q12
    P1Q25
    P2Q16
    P3Q31

    Table Z 

    PT
    P1T1
    P3T2
    P4T3
    P4NULL

    Consider the relational algebra expression $$ \Pi_{P, R, S} \left[ \left( \sigma_{(Q = Q3 \lor R = R2)} [X \bowtie Y] \right) \bowtie \left( \sigma_{(S > 1)} [Y \bowtie Z] \right) \right] $$ where $\bowtie$ denotes natural join operation. 

    Which of the following options is the correct output for the given expression?

  2. Consider a relational database schema with two relations $R(P, Q)$ and $S(X, Y)$.
    Let $E = \{\langle u \rangle \mid \exists v\ \exists w\ \langle u, v \rangle \in R\ \land\ \langle v, w \rangle \in S\}$ be a tuple relational calculus expression.
    Which one of the following relational algebraic expressions is equivalent to $E$ ?
  3. Consider the following three relations
    Employee (eid, eName), Comp(cid, cName), Own(eid, cid). Which of the following relational algebra expression return the set of eids who own all brands:

  4. Consider a database that includes the following relations: 

    Defender($name, rating, side, goals$) 

    Forward($name, rating, assists, goals$) 

    Team($name, club, price$) 

    Which ONE of the following relational algebra expressions checks that every name occurring in Team appears in either Defender or Forward, where $\phi$ denotes the empty set?

  5. Consider the following three relations:
    Car (model, year, serial, color)
    Make (maker, model)
    Own (owner, serial)
    A tuple in Car represents a specific car of a given model, made in a given year, with a serial number and a color. A tuple in Make specifies that a maker company makes cars of a certain model. A tuple in Own specifies that an owner owns the car with a given serial number. Keys are underlined; (owner, serial) together form key for Own. ($\bowtie$ denotes natural join)
    $ \pi_{\text{owner}} (\text{Own} \bowtie (\sigma_{\text{color}=\text{"red"}} (\text{Car} \bowtie (\sigma_{\text{maker}=\text{“ABC”}} \text{Make})))) $

Need Expert Advice?
Upcoming Exams
SSC Selection Post
September 16, 2026
Test Series
SSC CGL img
SSC
SSC CGL (Tier I + Tier II) 2026 Mock Test Series - Latest Pattern
2501 Tests 6 Tests Free
4422 Attempts
4.2(845)
English, Hindi

Start Your Preparation with Prepp Mobile App

Download the app from Google Play & App Store
Download the app from Google Play & App Store
Prepp Mobile App