The Finance Commission is established under which Article of the Indian Constitution?
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. 280.
Under Article 280, the President of India constitutes the Finance Commission every five years. It serves as a quasi-judicial body responsible for recommending the distribution of financial resources between the Union and the States. Its primary duties include suggesting the sharing of net tax proceeds and defining the principles for grants-in-aid. This mechanism ensures fiscal federalism, allowing for balanced economic development and financial stability across all Indian states and Union Territories.
Other Options:
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Article 268: Deals with duties levied by the Union but collected and appropriated by the States (such as stamp duties).
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Article 246: Relates to the subject-matter of laws made by Parliament and State Legislatures (Union, State, and Concurrent Lists).
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Article 365: Provides for the imposition of President's Rule if a State fails to comply with directions given by the Union.