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      Question

      Which Article(s) or Part(s) of the Constitution

      specifically provide for the Finance Commission and allocation of revenues (relevant to Parts XI & XII)?
      A Article 280 establishes the Finance Commission which recommends distribution of revenues between Centre and States. Correct Answer Incorrect Answer
      B Article 243 creates the Finance Commission. Correct Answer Incorrect Answer
      C The Finance Commission is created by the Seventh Schedule. Correct Answer Incorrect Answer
      D There is no constitutional body for revenue allocation; Parliament decides annually Correct Answer Incorrect Answer
      E The Finance Commission only deals with municipal finances. Correct Answer Incorrect Answer

      Solution

      Article 280 provides for the establishment of the Finance Commission, a key institution in India’s fiscal federal framework. Its primary function is to recommend the distribution of net tax proceeds between the Union and the States and to suggest principles governing grantsin-aid. The Finance Commission ensures financial autonomy of States while maintaining national economic unity. Though its recommendations are advisory, they carry substantial constitutional weight. In Union of India v. Harbhajan Singh Dhillon, the Court recognized fiscal arrangements as integral to federal balance. The Finance Commission thus operationalizes cooperative federalism by balancing revenue needs and responsibilities.

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