Finance Commission Questions Latest Finance Commission MC@ Objective Questions a ela Start Complete Exam Preparation Practice teed Corse aa Ga Question 1: View this Question Online > Who is the Chairman of the 14th Finance Commission? 1. Mr. C. Rangarajan 2. Shri N.KSingh 3. Dr. Y. V. Reddy 4. Dr. Vijay L. Kelkar Answer (Detailst? Solution! Below) % n3: De. V. Reddycoaching India’s Super Teachers for all govt. exams Under One Roof rer Finance Commission Question 1 Detailed Solution The correct answer is Dr. ¥. V. Reddy. ‘6 In News + Dr. Y. V. Reddy was appointed as the Chairman of the 14th Finance Commission of India. Key Points + Dr. Y. V. Reddy served as the Governor of the Reserve Bank of India (RBI) from 2003 to 2008. + He has a rich experience in pub! + The 14th Finance Commission was cc + Finance Commission of India Established under Article 280 of the Indian Constitution Role - To define the financial relations between the central government and the individual state governments It is appointed every rd monetary policy. stituted by the President of India on January 2, 2013. & Additional Informa‘ + Mr, C. Rangarajan He served as the Governor of the Reserve Bank of India from 1992 to 1997. He was the Chairman of the 12th Finance Commission. + Shri N.K. Singh He is a renowned Indian economist, politician, and former Indian Ad istrative Service He is the Chairman of the 15th Finance Commission. + Dr. Vijay L. Kellar He served as the Chairman of the 13th Finance Commission. He has also been an advisor to the Ministry of Finance. T_TIndia’s #1 Learning Platform Start Complete Exam Preparation Rear Toe re oes Reed Decree Question Bank Piette Download App Question 2: View this Question Online > Which Article of the Indian Constitution mentions about the salaries and allowances of the Chairman and Deputy Chairman of the Rajya Sabha and the Speaker and Deputy Speaker of the Lok Sabha? 1. Article 92 2, Article 97 3. Article 94 4. Article 95 Answer (Detailed Solution Below) Option 2: Article 97 Finance Commission Question 2 Detailed Solution The correct answer is Article 97 © Key Points + Article 97 of the Indian Constitution mentions the salaries and allowances of the Chairman and Deputy Chairman of the Rajya Sebhe and the Speaker and Deputy Speaker of the Lok Sabha. + These positions are crucial for the functioning of the Parliamentyand their salaries and allowances are determined to ensure the smooth operation of legislative activities. + The remuneration for these roles is provided by the Consolidated Fund of India. + The provisions ensure that the officials are compensated adequately for their responsibilities and duties in the legislative process.+ The Constitution of India was adopted by the Constituent Assembly on 26th November 1949 and came into effect on 26th January 1950, + It lays down the framework defining fundamental political principles, establishes the structure, procedures, powers, and duties of government institutions, and sets out fundamental rights, directive principles, and the duties of citizens. + The Constitution of India is the longest written constitution of any country in the world. + It declares India 2 Sovereign, socialist, secular, and democratic republic, assuring Its citizens justice, equality, and liberty, and endeavors to promote fraternity. + The Seventh Schedule of the Constitution contains three lists which delineate the subjects under the Union, State, and Concurrent lists. + Amendments to the Constitution can be made through a process outlined in Article 368, + The Union List has been amended several times to meet the evolving needs of the nation. & ieee an Rarity Start Complete Exam Preparation Cee te ete oats’ Taney oer Protea Download App Question 3: View this Question Online > The Finance Commission of India consists of 1. a Chairperson and four other members 2. a Chairperson and three other members 3d Figson ane two other members 4. Chairperson and five other members Answer (Detailed Solution Below) Option 1 : a Chairperson and four other members Finance Commission Question 3 Detailed Solution The correct answer is a Chairperson and four other members© Key Points + The Finance Commission of india consists of a Chairperson and four other members. + The Finance Commission is constituted by the President of India every five years. + Its primary function is to define the financial relations between the central government and the individual state governments. + The Commission makes recommendations on the distribution of tax revenues between the Union and the States and among the States themselves. + It also addresses issues related to grants-in-aid to the states by the Union government. & Additional Inf + The Finance Commission wes established by the President of India in 1951 under Article 280 of the Indian Constitution + The recommendations made by the Finance Commission are advisory in nature and not binding on the government. + The Chairperson of the Finance Commission is typically a person with experience in public affairs, and the other four members are selected based on their expertise in finance, economics, administration, or law. + The Commission also reviews the state of finances of the Union and the States and suggests measures for maintzining @ stable and sustainable fiscal environment in the country. Eee acca) Scam Ce CMLL ell Rec r t Cetcs re rai eancrard edo Question Bank Bivens Download App Question 4: View this Question Online > Which of the following statements with regard to the constitution of Finance Commission is/are correct? 1. The Government of India has recently constituted the Sixteenth Finance Commission under the Chairmanship of Dr. Arvind Panagariya. 2. Finance Commission is constituted in pursuance to Article 263 of the Constitution of India. Select the answer using the code given below: 1, only 2. 2only @ \!et 4 Ne one of the above 5. None of the above Answer (Detailed Solution Below) Option 5 : None of the above Finance Commission Question 4 Detailed Solution The correct answer is None of the above. © Key Points Constitution of Finance Commission + The Finance Commission is a constitutional body that is constituted by the President of India every five years, or earlier if needed. + It is established under Article 280 of the Constitution of India. + The primary function of the Finance Commission is to recommend the distribution of the net proceeds of taxes between the Centre and the States, and among the States themselves. Explanation of the Statements: + Statement 4: "The Government of India has recently constituted the Sixteenth Finance Commission under the Chairmanship of Dr. Arvind Panagariya.” = This statement is incorrect. As of my knowledge cutoff date in 2023, the Fifteenth Finan < Commission was constituted in 2017, and its chairman was N.K. Singh. There is Consider the following statements regarding State Finance Commission? 1. It is a constitutional body. 2. It is constituted by the Governor of the state. 3. The Chairman of the State Finance Commission submits his resignation to the President. 4, The tenure of the State Finance Commission is three years. Which of the statements given above'is/are correct? 1. 1 andi are'€orrect. 3. 1,2 and 3 are correct. 4. More than one of the above 5. None of the above Answer (Detailed Solution Below)Option 2: 1 and 2 are correct. Finance Commission Question 5 Detailed Solution The correct answer is 1 and 2 are correct. © Key Points + Article 2431 of the Indian Constitution prescribes that the Governor of a State shall constitute a Finance Commission. + The State Finance Commission has to review the financial position of the Panchayats and to make recommendations to the Governor as to + The principles which should govern 1. The distribution between the State and the Panchayats of the net proceeds of the taxes, duties, tolls, and fees leviable by the State, which may be divided between them under this Pé ¢ allocation between the Panchayats at all levels of their respective shares of roceeds 2. The determination of the ‘axes, duties, tolls, and fees that may be assigned as, or appropriated by the Panchayats 3. The grants-in-aid to the Panchayats from the Consolidated Fund of the State + The measures needed to improve the financial position of the Panchayats > Any other matter referred to the Finance Commission by the Governor in the interests of Sound finance of the Panchayats. + Article 243Y of the Constitution further provides that the Finance Commission constituted under Article 243 | shall make similar recommendations vis-a-vis municipalities. + The Governor shall constitute every five years a Finance Commission to review the financial position of the Zilla Parishads and Gram Panchayats and to make recommendations to the Government + The member of the Finance Commission may resign his office by writing under his hand and addressed to the Governor but he shall continue in office until his resignation is accepted by the Governor. Tie anu Rarity Start Complete Exam Preparation iG) Pars he ip Docier oa Cress & Quizzes OR ecm Ceti ‘Question 6 View this Question Online > Which of the following is NOT an example of the indirect form of taxation?2. Custom Duty = a 4, Income Tax Answer (Detailed Solution Below) Option 4: Income Tax Finance Commission Question 6 Detailed Solution + Income Tax is not an example of indirect tax it comes under the direct tax. + Indirect tax is a type of tax collected by the government from an intefmediaryand are not directly transferred to the government. + Examples of Indirect tax are service tax, sales tax etc. + A direct tax is borne directly by the entity that pays it. + Examples of direct taxes are income tax, corporation tax ete. © Shortcut Trick + Tick — "Wepro, co, in © We- Wealth Tax * Pro- Property Tax * Co- Corporate Tax In- Income Tax + Trick — "Excuse Me (Indirect Taxe: ° Ex: Excise tax * Cu- Custom tax * Se- Service tax 2 M- Market tax/vat » E- Entertainment tax ect Taxes)” a ay ee en Start Complete Exam Preparation Pte Practice mea Ged tae isang eae emer TasDownload App ‘Question 7 View this Question Online > The Planning Commission was set up by the Government of India in the year: > \ 2. "F950 3. 1949 4. 1951 Answer (Detailed Solution Below) Option 2: 1950 Finance Commission Question 7 Detailed Solution The correct answer is 1950. » Important Points + The Planning Commission was replaced by the NITI Aayog. + It was established on 18 March 1950, with Prime Minister Jawaharlal Nehru as the chairman. * Planning Commission Functions: > Formulate and aap for the most balanced and effective usage of the country’s resour ; Make and define the St2¢es of an evaluation of the capital, material, and human resources of the nation, including technical personnel, and study the possibil of enhancing these resources for building up the nation. - Determine and indicate the factors that the kind of machinery required for obtaining the successful execution of each stage of the Plan in all its aspects. @ Key Points + The first Five-year Plan was launched in 1951. + The present Chairman of NITI Aayog - Prime Minister Narendra Modi.India’s #1 Learning Platform element) Cacao iG pee 7) Mock Tests Dotan pits Download App ‘Question 8 View this Question Online > Article 280 of the Indian Constitution lays down the establishment of the 4. Planning Commission 2. Inter-State Council 3. River Waters Tribunal 4, Finance Commission Answer (Detailed Solution Bolow) Option 4: Finance Commission Finance Commission Question 8 Detailed Solution The correct answer is the Finance Commission. © Key Points + According to Article 280, the Finance Commission is established for a period of § years. + The Finance Commission is a ‘constitutional body’ constituted by the President of India which gives its stion to the’President on the states’ share in the taxes of the Center + Finance Commision ed by the President for a period of 5 years. &; Additional Information + The 14th Finance Commission was headed by Y. V. Reddy. + The 15th Finance Commission is headed by Nand Kishore Singh. + The Finance Commission of India was established in 1951. + The first chairman of the Finance Commission was K. C. Neogy.re Ore ane pica Sela me CM CnC ell iG} PO eee’ f Pca cit ‘Question Bank Sa Download App Question 9 The State Finance Commission is a 1. Legal body 2. Non-statutory body f 3. Constitutional body 4. None of the above ~ Ag octies Solution Below) Option 3 : Constitutional body Finance Commission Question 9 Detailed Solution The correct answer is Constitutional body. © key Points Ct or View this Question Online > + The State Finance Commission is a Constitutional Body, as it is formed under the 73rd Constitutional Amendment Act 1992. + Under Article 280, the State Finance Commission was established in all the states of India from 1993 on the lines of the Finance Commission of the Center. + Objectives: To review the financial status of the Panchayats. + According to Article 243 I of the indian Constitution, the State Finance Commission is appointed by the Governor for a period of 6 years. + The Governor also appoints the other members (maximum 4) for the commission. » Important Points + Grounds of Recommendations:= Allocation of net income of taxes, duties, tolls, and fees levied by the State between the Panchayats and the State. @ Itcan be spent or allocated at different levels of the panchayat, © Determining how many taxes, fees, tolls, and charges may be assigned to’panchayats. * Grant-in-aid to Panchayats. + Functions of the Commission: + Reviewing the economic status of various Panchayati Raj Institutions and Municipal Bodies located in the state. * To take various steps to improve the financial condition of various municipal bodies and Panchayati State institutions located. inthe state. + Allocation of funds from the Consolidated Fund of the State to various Panchayati Raj Institutions and MunicipallBi@jes located in the State = To act as an intermediary between the Central and State Governments about financial issues. + Utilizing the funds provided by the Central Government to the State Government. §&; Additional Information + Finance Commission: + Under Article 280 of the Constitution, the President of India must set up a Finance Commission every five years or earlier. = The Finance Commission is a constitutional body, which lays down laws and formulas for the distribution of income derived from tax between the Center and the States and between the States following the constitutional system and current requirements. = The 15th Finance Commission was constituted by the President of India in November 2017 under the chairmanship of NK. Singh. = Its recommendations will be valid for 2 period of five years from the year 2021-22 to 2025-26. ees ree acy Re yo Same oll (im) Practice (e] Neraned ces cag pit Download App Doster oo ‘Question 10 View this Question Online > Who determines the centre - state financial relations from the following? 1. Ministry of Finance 2. National Development:Gouncil 3 ARR Commission4. Finance Commission Answer (Detailed Solution Below) Option 4: Finance Commission Finance Commission Question 10 Detailed Solution The correct answer is the Finance Commission. © Key Points + Article 280 of the Indian Constitution provides for a Finance Commission as a quasi- judicial body. * Itis constituted by the President of india every fifthyyear of at such an earlier time as he considers necessary. + It is set up to define the financial relations between the central government of India and the individual state governments. + It is requited to make recommendations to the President of India on the following matters - ° The distribution pet process of taxes to be shared between centers and the states and the allocation batiWen the states of the respective shares of such proceeds. * the principle that shotf'hovern grants-in-aid to the states by the Centre. + The measures needed to Consolidated Fund of State to supplement the resource of the panchayats and the municipalities on the basis of the recommendation of the State Finance Commission. ‘Question 11 NA The first Finance Coma s set up in the year: Answer (Detailed Solution Below) Option 3: 1951 Finance Commission Question 11 Detailed Solution The correct answer is 1951. © Key Points + Finance Commission is a Constitutional body that defines the financial relationshii the Central Government and the State Government. * The first Finance Commission came into existence on 22"4 Novembs Chairman was Kshitish Chandra Neogy. + The headquarters of the Finance Commissio1 New Delhi, * Nand Kishore Singh is the Chairman cf the 15¢ Fi ission (Februsry 2021) preceded by Dr. Yaga Venugopal Reddy. + Dr. Arvind Panagariya is the current chairmai TH FINANCE COMMISSION OF INDIA + Arvind Mehta is the Secretary o* the inance Commission. (February 2021) & Additional Informati + The President of India constitutes the Finance Commission every five years which consists of a chairman and four other members. + Article 280 of the Constitution of India deals with the Finance Commission and Article 2431 deals with the State Finance Commission, + The bodies which are mentioned in the Indian Constitution and are considered more powerful and Independent are known as Constitutional bodies, and those which are not mentioned in the Constitution are known as Non-Constitutional bodies. Finance Commission is Constitutional body. eae peace aca eaeof Panchayats and Municipalities. a taal MO al a a ia a aaa Ee eeu) Seamer Ceol) Cee cot easy Mock Tests es pit Download App ‘Question 12 ‘View this Question Online > With reference to the Union Finance Commission, which of the following statements is/are correct? (1) Finance Commission has a Chairman and six members. (2) It submits its report to the NITI Aayog. Select the correct answer using thé code given below- 1, Both 1 and2 Ry 3. Neither 1 nor 2 4. Only 1 Answer (Detailed Solution Below) Option 3: Neither 1 nor 2 Finance Commission Question 12 Detailed Solution The correct answer is Neither 1 nor 2. © Key Points Union Finance Commission + Finance Commission is a Constitutional body that defines the financial relationship Ge ee tee, Pe a oe+ The first Finance Commission came into existence on 22nd November 1961 and its Chairman was Kshitish Chandra Neogy. + The headquarters of the Finance Comimission isin New Delhi, + Article 280 of the Constit of Indiaydeals with the Finance Commission and Article 2431 deals with the State Fotis + The President of India c: fe the Finance Commission every five years. + Composition of Finance Commission: Chairman and 4 members. Hence statement incorrect. + The eligibility of members of the Finance Commission is determined by the Parliament of India. + The constitution authorizes the parliament to determine the qualification of members of the commission and the manner in which they should be selected. + The commission submits its report to the president. Hence statement 2 is incorrect. * The recommendations of the finance commission are only of advisory nature and hence, not binding on the government. + The governor constitutes Finance Commission every five years to review the financial position of Panchayats and Municipalities. Eats ey oar ce eotcat Slam Ce cel) os eee Peace head ee Cres ero Bitte Download App Question 13 », View this Question Online > was the Chairman of the first Finance Commission of India. 1. YB Chavan 2. AK Chanda ¢ of 4. PV Rajamannar Answer (Detailed Solution Below) Option 3: KC NeogyFinance Commission Question 13 Detailed Solution The Correct Answer is KC Neogy. © Key Points + The First Finance Commission was constituted vide Presidential Order dated 22.11.1991 under the chairmanship of Shri K.C. Neogy on 6th Apiil 1952. + Fifteen Finance Commissions have been Constituted so far at the intervals of every five year. + The Finance Commission is constituted by the President under article 280 of the Constitution, mainly to give its recommendations on the distribution of tax revenues between the Union and the Se the States themselves. + Two distinctive features ‘ommission’s work invalve redressing the vertical imbalances between the taxation pi nd expenditure responsibilities of the centre and the States respectively and equalization of all public services across the States. + The recommendations of the Finance Commission are implemented as under:- + Those to be implemented by an order of the President. @ The recommendations relating to the distribution of Union Taxes and Duties and Grants-in-aid fall in this category. © Those to be implemented by executive orders. @ Other recommendations to be made by the Finance Commission, as per its Terms of Reference GEE ABUL hele) Start Complete Exam Preparation Rr eetreas Gee cy eancard poe croiee Crestron reas Download App ‘Question 14 \ View this Question Online > The Finance Commission of India submits its report to. . The head of NITI Ayog 2. The Finance minister of india 3. The Presidentfindia 4 ~.- minister of IndiaAnswer (Detailed Solution Below) Option 3 : The President of India Finance Commission Question 14 Detailed Solution The correct answer is The President of India. @ Key Points + The Finance Commission of India is a constitutional body that is set up under Article 280 + Its primary responsibility is to recommend the distribution of tax revenues between the central and state governments. + The Finance Commission submits its report to the President of india iho ithe head of the state and represents the country internationally. + The President of India appoints the members of the Finance Commission, and their recommendations are binding on the government, + The Finance Commission's report is an essential document that guides the allocation of Tesources between the center and the states &- Additional Inform + NITI Ayog is a policy thin! of the Government of India that replaced the Planning Commission. + It is responsible for providing strategic and technical advice to the government on various policy matters. + The Finance Minister of India is responsible for managing the finances of the government, including taxation, expenditure, and borrowing. + The President of India is the head of the state and the commander-in-chief of the armed forces. + The President is elected by an electoral college and holds office for a term of five years. + The President has the power to appoint various constitutional bodies and make appointments to various positions in the government. Rg India's #1 Learning Platform Blame Ce cme) Recon A oto iG) eae’ Treaty Download App Question Bank pittaSpSeen rs oo Mew this Question Online > The State Finance won ted every __ years by the 5, state g | government 2.5, state government * 2.5, central government Answer (Detailed Solution Below) Option 1: 5, state government Finance Commission Question 15 Detailed Solution The correct answer is 5, state government, State ance Comi ns (SFCs) + The State Finance Commission (SFC) is crea Amendments to manage State level fiscal + Under Article 243-1 of the Constitutio! constitute a Finance Commissi * It decides the resource all Raj Institutions + It allocates resources een the state government and the Panchayati yyati Raj institutions at all three levels in terms of taxes, duties and levies to be collected by the state and the local bodies. + Article 243Y:- SFC shall 2|so review the financial position of the Municipalities and Panchayats end make recommendations to the Governor about the principles that should govern the distribution of tax collected by the state. * It also recommends about: * Grants-in-aid to Panchayati Raj Institutions from the consolidated fund of a state. = Ways to improve the financial position of the Panchayati Raj Institutions