Constitutional and Non-Constitutional Bodies PYQs – Polity, SSC & Railway

Answer: Option 3 — Article 280
Article 280 requires the President to constitute a Finance Commission every five years (or earlier).
It recommends how the net proceeds of taxes are divided between the Centre and the States, and among the States.
Revision note — Finance Commission
• A quasi-judicial constitutional body; 1 Chairman + 4 members, appointed by the President.
• Qualifications of members are fixed by Parliament — Finance Commission (Miscellaneous Provisions) Act, 1951.
• 1st Finance Commission (1951) — Chairman K.C. Neogy.
• 15th FC — N.K. Singh; states' share 41% of the divisible pool (2021–26).
• 16th FC (constituted 31 December 2023) — Chairman Arvind Panagariya, for 2026–31.
• Recommendations are advisory, not binding; under Article 281 the President lays them before Parliament.
• Article 275 — statutory grants-in-aid; Article 282 — discretionary grants.
Do not mix these up
• Article 280 vs Article 243-I / 243-Y — 280 is the Union Finance Commission; the State Finance Commission for panchayats and municipalities comes under 243-I and 243-Y.
Also asked from this topic: who appoints the Chairman and members of the Finance Commission (the President); the Article for statutory grants-in-aid to States (Article 275).