UPSC Prelims 2000·GS1·polity-and-governance·federal structure

The primary function of the Finance Commission in India is to

Dalvoy logo
Reviewed by Dalvoy
UPSC Civil Services preparation
Last updated 23 May 2026, 3:31 pm IST
  1. Adistribute revenue between the Centre and the StatesCorrect
  2. Bprepare the Annual Budget
  3. Cadvise the President on financial matters
  4. Dallocate funds to various ministries of the Union and State Governments

Explanation

The correct answer is A because the Finance Commission is a constitutional body established under Article 280 specifically to address the vertical and horizontal imbalance of resources. Its main task is to recommend the distribution of the net proceeds of taxes between the Union and the States, as well as the allocation between the States themselves. While it also recommends principles for grants in aid, its core function is the division of revenue. Option B is the responsibility of the Ministry of Finance, Option C is too broad, and Option D refers to the role of the Budget and the Planning process rather than the Finance Commission.
polity-and-governance: The primary function of the Finance Commission in India is to
ShareWhatsAppXTelegram

Related questions

More UPSC Prelims practice from the same subject and topic.