Finance Commission of India (FCI)

Established           : 2004
Govt Body Type    : Statutory body
Appointed by        : President of India

The Finance Commission is a Constitutionally mandated body that is at the centre of fiscal federalism. Set up under Article 280 of the Constitution. Finance Commission core responsibility is to evaluate the state of finances of the Union and State Governments, recommend the sharing of taxes between them, lay down the principles determining the distribution of these taxes among States. The first Finance Commission was set up in 1951.

Qualifications 
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 had wide experience in financial matters and in administration; or
• have special knowledge of economics.

Appointment 
The Finance Commission is appointed by the President of India under Article 280 of the Constitution.

Recommendation of Commission
The Commission shall make recommendations as to the following matters

1. Distribution of net proceeds of taxes between Center and the States.
2. The measures needed to augment the Consolidated Fund of a State to supplement the resources of the Panchayats and Municipalities in the State on the basis of the recommendations made by the Finance Commission of the State.  
3. Any other matter related to it by the president in the interest of sound finance.