India Finance Commission Act

The India Finance Commission Act was drafted to give a structured format to the Finance Commission of India as per the world standard. Actually, the British rulers felt the need for a commission for guiding the Finance of India during the late 1660. The basic structure of the modern day India Finance Commission Act was laid down during the British rule in the early 1920s. The basic structure of the finance commission India was drafted to ward-off the eminent danger of rising business rivalry from other European countries and to prolong the dominance of British rule in India.

The Finance Commission (Miscellaneous Provisions) Act, 1951 defines the qualification, appointment, disqualification, term, eligibility, service, salaries and powers of the Finance Commission.

The latest provisions of the India Finance Commission Act, 1951

Short title - This Act may be called the Finance Commission (Miscellaneous Provisions) Act, 1951.

Definition - In this Act, "the Commission" means the Finance Commission constituted by the President pursuant to clause (1) of article 280 of the Constitution.

Qualifications for appointment and the manner of selection as per the India Finance Commission Act

The Chairman of the Commission shall be selected from among persons who have had experience in public affairs, and the four other members shall be selected from among persons who--

• Have been, or are qualified to be appointed as Judges of a High Court or
• Have special knowledge of the finances and accounts of Government or
• Have wide experience in financial matters and in administration or
• Have special knowledge of economics

Disqualifications of a member of the Commission shall be on the following grounds -

• Have been, or are qualified to be appointed as Judges of a High Court or
• Have special knowledge of the finances and accounts of Government or
• Have had wide experience in financial matters and in administration or
• Have special knowledge of economics

Personal interest to disqualify members as per the India Finance Commission Act

• Before appointing, the President shall satisfy himself that the appointee have no such financial or other interest which may be prejudicial to his duties


• The President shall also satisfy from time to time with respect to every member that he has no such interest and any other member, or any future appointee


• A member shall, whenever required by the President should furnish him such information as the President considers necessary for the evaluation of performance

Disqualifications of a member of the Commission shall be on the grounds of

• Unsound mind
• Convicted of an offense involving moral turpitude
• Financial or other interest as is likely to be prejudicial to his functions
• Outstanding bankruptcy

Term of office of members and eligibility for reappointment as per the India Finance Commission Act

The President shall specify the term period of holding offices to each member. The member shall be eligible for reappointment, until he may, by letter addressed to the President, resign from his office.

Service and salaries as per the India Finance Commission Act

The members shall discharge whole-time or part-time service as the President may fix, and they hall be paid such fees or salaries and such allowances as the Central Government may, by rules determine.

Procedure and powers as per the India Finance Commission Act

• The Commission shall determine their procedure and shall have all the powers of a civil court as per the Code of Civil Procedure, 1908 (5 of 1908). Further, it can also summon and enforce the attendance of witnesses, ask for production of any such related document, and ask for any public record or document from any court or office


• Shall have power to ask any person to furnish information or document on such points or matters as it may feel necessary be useful or relevant to such proceedings


• Shall be deemed to act as a civil court for discharging its duties