Which body recommends the distribution of tax revenues between union and states?
Show answer & explanation
Correct answer: C
Explanation
Correct Answer:
Finance Commission
Explanation:
The Finance Commission is a constitutional body established under Article 280 of the Indian Constitution by the President of India. Its primary responsibility is to recommend the distribution of net tax proceeds between the Union (Central Government) and the States, as well as among the respective States themselves, to ensure a fair and balanced fiscal federalism.
Key Points:
• The Finance Commission is constituted every five years or at such earlier time as the President considers necessary.
• It also lays down the principles governing the grants-in-aid of the revenues of the States out of the Consolidated Fund of India.
• The recommendations made by the Finance Commission are advisory in nature, though they are conventionally accepted by the government.
Important Questions and Answers:
Question: Under which article of the Indian Constitution is the Finance Commission established?
Answer: Article 280.
Question: Who appoints the Chairman and members of the Finance Commission of India?
Answer: The President of India.