The
historical perspective of Finance Commission India indicates that numerous factors coincidentally necessitated for the formation of the finance commission India. The historical perspective of Finance Commission India also indicates that the need for such financial commission of India was felt by the British rulers during the late 1660 to protect its trade and commerce business from the growing threats from the other European business rivals like the Dutch, Portuguese and the French. Further, the basic draft of the provisions of finance commission of India was made in the early 1920s, to consolidate the business dominance of the British Rule in India. The first structured draft of the finance commission was a hollow structure and it drew intense adverse criticisms from different Indian leaders of India. A commission was formed to look into the loopholes of the drafted provision of the Finance commission and make necessary changes to it.
The historical perspective of Finance Commission India after independence:
The Finance Commission of India was established as per the drafted Acts and Rules in the year 1951. The President of India is empowered with the selection and responsibilities of the finance commission of India. Further, the President of India assigns the term of their office of the Finance commissioner and the four other member of the commission. The commissioner and the four members of the Finance Commission of India are answerable, directly to the President of India. The President of India constitutes a Finance Commission within maximum of two years from the commencement of the draft and thereafter completion of every fifth year or at earlier time (as he deems necessary). The Finance Commission consists of a chairman and four other members, appointed by the President himself. The qualification of the commissioner and the four members are determined by the elected parliament and by formulating appropriate law.
The main responsibilities of the Indian Finance Commission:
The duty of the Finance Commission shall entail recommendations to the President of India on -
- Distribution of the income of the government (including central and state governments) as per proportion or according to the contribution made towards such collection of revenues by each such state governments or central government
- Define the grounds on which the government should allocate the grants-in-aid of the revenues of the Indian states out of the consolidated fund of India. The quantum of allocation of such funds needs to compliment the requirements of the panchayat and resource of the Consolidated Fund of a State. The quantum of allocation of such funds needs to compliment the requirements of the Municipalities in the State and the resources of the Finance Commission of the State.
- Any other matter referred to the Commission by the President in the interests of sound finance.
- The Finance Commission of India shall also determine the operational process and is vested with such powers in the operation as per the provisions enacted by the parliament of India
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