Finance Commission

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Finance Commission

The Finance Commission is constituted by the President of India every fifth year or at such an early time as he considers necessary.

It consists of a Chairman & 4 other members. They are eligible for re – appointment.

The Chairman is selected from persons who have had experience in public affairs, while the members are selected from the persons who:

  • Qualified to be appointed judges of High Court.
  • Have special knowledge of the finance & accounts of govt.
  • Wide experience in financial matter & in administration.
  • Have special knowledge of Economics.

Presently 12th Finance Commission is working. (C. Rangarajan – Chairman).


  • To recommend to the President distribution of net proceeds of the taxes which are divisible between Union and States
  • To recommend the principles this should govern the Grants of the revenues of the State out of the Consolidated Fund of India.
  • The recommendations made by it are only of advisory nature and hence, not binding on the Government.
  • To tender advice to the President on any other matter referred to the Commission in the interest of sound finance.

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To curb political defection, added by 52nd amendment in 1985.

Any Member of Parliament belonging to any political party can be disqualified.

  • If he voluntarily gives up the membership of that political party.
  • If he votes or abstains from voting according to the party ‘whip’.

Any independent member can be disqualified if he joins any political party after election.

Any nominated member can be disqualified if he joins any political party after the expiry of 6 month from the date of his joining.

This law shall not apply:

  • To a situation of ‘merger’ in which at least 2/3 members of any party are involved.
  • To a person who resigns membership of his party after becoming the Presiding officer of the house & he rejoins the party after laying down that office.

Recently, the Supreme Court in a significant ruling held that a Member of Parliament or a State Legislature can be disqualified for defying a whip only on two counts, that is voting on a motion of confidence or no-confidence and when the matter relates to the programme and policies of that political party.

Official Language

The Constitution declared Hindi as the official language of India.

However, it permitted the use of English for official purposes for a period of 15 years from the commencement of the Constitution.

The Parliament was authorized to allow the use of English even beyond this period.

In 1964, the Parliament passed the Official Language Act, 1964, which permitted the use of English as official language up to Jan. 26, 1971.

Again, through the Official Language (Amendment) Act, 1967, it was provided that use of English would continue indefinitely.

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