Previous Year Question

The State Finance Commission is provided for under Article 243-I of the Constitution. Since its basis is directly provided by the Constitution, it is a Constitutional body.

Under Article 243-I, the Governor of a State constitutes a Finance Commission every five years to review the financial position of the Panchayats and make recommendations to the Governor regarding the distribution of financial resources and related matters.

Under Article 243-Y, the same Finance Commission also reviews the financial position of Municipalities and makes recommendations to the Governor concerning them.

It should be distinguished from the Union Finance Commission constituted under Article 280; both are separate constitutional institutions.