With reference to the Finance Commission of India, consider the following statements:

1. According to the constitution of India, the members of the Finance Commission shall hold office for a period of 5 years from the date of appointment.

2. The chairman of the Commission is selected from among persons who have had experience in public affairs .

3. The members of the commission are not eligible for reappointment.

Which of the above statements is/are correct ?

Solution

● Statement 1 is incorrect: The constitution doesn't explicitly mention the term of the members of the finance commission. It only puts an obligation on the President to constitute a 5 member Finance Commission by order at the expiration of every fifth year or earlier. However, according to THE FINANCE COMMISSION (MISCELLANEOUS PROVISIONS) ACT, 1951 every member of the Commission shall hold office for such period as may be specified in the order of the President. Thus, there is no fixed term of office for members of the Finance Commission ● Statement 2 is correct: THE FINANCE COMMISSION (MISCELLANEOUS PROVISIONS) ACT, 1951 stipulates that the chairperson of the commission shall be selected from among persons who have had experience in public affairs. According to the act, the four other members shall be selected from among persons who : are, or 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 ● Statement 3 is incorrect: the constitution is silent on whether or not the members of the finance commission are eligible for reappointment. However, according to Section 6 of the act (mentioned above), every member of the Commission shall be eligible for reappointment. Extra edge by PW OnlyIas 15th finance commission: • It has recommended maintaining the vertical devolution at 41% - the same as in its interim report for 2020-21. It is at the same level of 42% of the divisible pool as recommended by the 14th Finance Commission. It has made the required adjustment of about 1% due to the changed status of the erstwhile State of Jammu and Kashmir. • For Horizontal Devolution, refer to the infographic here.