🧾 Article 280 of the Indian Constitution
Title: Finance Commission
🔍 What is Article 280?
Article 280 provides for the constitution of a Finance Commission (FC) by the President of India, every five years or earlier if necessary.
It plays a key role in ensuring fiscal federalism — a fair financial relationship between the Centre and the States.
📘 Key Provisions of Article 280:
| Clause | Provision |
|---|---|
| (1) | The President shall constitute a Finance Commission within 5 years of the last one. |
| (2) | The Commission shall consist of a Chairman and four other members, qualified as specified by Parliament. |
| (3) | The Commission shall make recommendations on: |
-
Distribution of net proceeds of taxes between the Union and the States.
-
Principles governing grants-in-aid to states from the Consolidated Fund of India.
-
Any other matter referred by the President in the interest of sound finance. |
| (4) | The President shall lay the report of the Commission before Parliament, along with a memorandum explaining the government’s actions on the recommendations. |
🧑⚖️ Who Appoints the Finance Commission?
-
Appointed by the President of India
-
Headed by a Chairman, usually an economist, judge, or financial expert.
📊 Finance Commission Powers and Roles:
| Role | Details |
|---|---|
| Tax Sharing | Recommends how tax revenue is shared between Centre & States. |
| Grants-in-aid | Suggests financial assistance to states in need. |
| Fiscal Consolidation | Promotes financial stability and equity among states. |
| Other Matters | Can advise on issues like disaster relief funds, etc. |
🔁 Recent Finance Commissions:
| Finance Commission | Period | Chairman |
|---|---|---|
| 14th FC | 2015–2020 | Y.V. Reddy |
| 15th FC | 2020–2025 | N.K. Singh |
| 16th FC | To be formed (2026) | Yet to be appointed |
🧠 Why Article 280 is Important:
-
Maintains fiscal balance between Union and States.
-
Ensures financial autonomy of States.
-
Encourages responsible governance by promoting accountability in fund usage.
Follow Us