WBCS.LIVE practice question

What is the main function of the Finance Commission?

Solve this multiple-choice question and check the correct answer with its explanation below.

Answer options

  1. Reviewing of National Plan from time to time.
  2. Distribution of revenues between Union and states.
  3. Inquiring into and advising upon disputes arising between two States.
  4. Formulation of Plans for all round development.

Correct answer and explanation

Correct answer: Distribution of revenues between Union and states.

Explanation: āœ… Correct Answer: B. Distribution of revenues between Union and states. šŸ“š Explanation: The Finance Commission is a constitutional body established under Article 280 to recommend how the net proceeds of taxes should be shared between the Central Government and the States. it helps maintain fiscal federalism in India. The commission also advises on the principles that should govern the grants-in-aid given to the states. its reports are essential for ensuring a fair and transparent division of national wealth.