Question

Which constitutional body appointed by the President every five years to review centre-state financial relationships?
1. Inter State Commission
2. Inter State Council
3. Finance Commission
4. Zonal Council

Answer 1

Correct Answer - Option 3 : Finance Commission

The correct answer is the Finance Commission.

• The Finance Commission of India is established by the President of India as per Article 280 of the constitution.
• Article 280 reads: President should, within two years of commencement of the Constitution and thereafter on expiry of every 5th year, or at such intervals as he/ she thinks necessary, would constitute a Finance Commission.

• Finance Commission is a constitutional body for the purpose of allocation of certain revenue resources between the Union and the State Governments.
• It was established under Article 280 of the Indian Constitution by the Indian President.
• It was created to define the financial relations between the Centre and the states.
• It was formed in 1951. 
• President of India constitutes the Finance Commission every five years or on time considered necessary by him.