Finance Commission

Finance commission is a quasi-judicial body set up under Article 280 of the Indian Constitution. It was established in the year 1951, to define the fiscal relationship framework between the Centre and the state.

• Finance Commission aims to reduce the fiscal imbalances between the centre and the states (Vertical imbalance) and also between the states (horizontal imbalance). It promotes inclusiveness.
• A Finance Commission is set up once in every 5 years. It is normally constituted two years before the period. It is a temporary Body.
• The 14th Finance Commission was set up in 2013. Its recommendations were valid for the period from 1st April 2015 to 31st March 2020.
• The 15th Finance Commission has been set up in November 2017. Its recommendations will be implemented starting 1 April 2020.