Phase IFoundation
Background
Overview
The Finance Commission is a crucial constitutional body whose recommendations significantly shape India's fiscal federalism, impacting Centre-State financial relations, state finances, and public service delivery across the country. Its role in addressing fiscal imbalances and promoting equity is central to governance.
The Finance Commission (FC), constituted under Article 280 of the Constitution, is a quasi-judicial body that determines the distribution of the Union’s gross tax revenues between the Centre and States (vertical devolution) and among the States themselves (horizontal devolution) to address fiscal imbalances.