Q1. Finance Commission is appointed after every
(a) 2 years
(b) 5 years
(c) 7 years
(d) 10 years
(UPSC Prelims 1980)
Answer: (b) 5 years
Explanation: The Finance Commission is constituted every 5 years to recommend the distribution of financial resources between the Centre and States.
Q2. Finance Commission is appointed for
(a) Passing the money bills
(b) Approving money bills
(c) Drafting the budget
(d) Making recommendations to the President regarding the distribution between the Union and the States of the net proceeds of the taxes
(UPSC Prelims 1982)
Answer: (d)
Explanation: The Finance Commission is a constitutional body that advises the President on the distribution of tax revenues between the Centre and States, ensuring fiscal balance and equity.
Q3. Centre-State financial relations are looked after by the
(a) Finance Commission
(b) Sarkaria Commission
(c) Ministry of Finance
(d) Planning Commission
(UPSC Prelims 1984)
Answer: (a) Finance Commission
Explanation: The Finance Commission is a constitutional body that recommends the distribution of financial resources between the Centre and States, including tax sharing and grants-in-aid, ensuring fiscal balance.