Previous Year Question
With reference to Union Finance Commission, which of the following statement/s is/are correct?
Finance Commission has a Chairman and six members.
It submits its report to the NITI Aayog.
Select the correct answer using the code given below:
Only 2
Neither 1 nor 2
Both 1 and 2
Only 1
Correct Answer: B
Detailed Solution
Statement 1 is incorrect.
Under Article 280(1) of the Constitution of India, the President constitutes a Finance Commission.
The Finance Commission consists of—
One Chairman + Four other Members
Therefore, its total composition is—
1 Chairman + 4 Members = 5
and not one Chairman and six members.
The Finance Commission (Miscellaneous Provisions) Act, 1951 also prescribes qualifications for the Chairman and the four other members.
Broadly, the four members may be selected from persons having—
qualification to be appointed as a Judge of a High Court,
special knowledge of government finance and accounts,
wide experience in financial matters and administration, or
special knowledge of economics.
Statement 2 is also incorrect.
The Finance Commission does not submit its report to NITI Aayog.
Under Article 281 of the Constitution, the recommendations of the Finance Commission are submitted to the President of India.
The President then causes the recommendations of the Finance Commission, together with an explanatory memorandum regarding the action taken on them, to be laid before—
both Houses of Parliament.
Thus, the constitutional process is—
Finance Commission → President of India → Parliament
and not—
Finance Commission → NITI Aayog ✘
The Finance Commission is a constitutional body, whereas NITI Aayog is an executive policy institution. NITI Aayog has no such constitutional role in receiving the Finance Commission's report.