A constitutional body set up every five years to recommend how the Centre's tax revenues are shared with the States and among the States.
- Constituted by the President under Article 280, normally every fifth year or earlier.
- Recommends the vertical devolution (Centre to States' share of the divisible pool) and horizontal distribution (among States), plus grants-in-aid under Article 275.
- Has a chairman and four other members; its recommendations are advisory, but by convention largely accepted.
- The 15th Finance Commission (chaired by N. K. Singh) recommended a 41 percent States' share of the divisible pool; verify the latest Commission and its exact share.
- It is the main instrument of fiscal federalism, distinct from the erstwhile Planning Commission and from NITI Aayog.
Article 280, the five-year cycle, and the devolution share are standard fiscal-federalism facts; the body links concept cag and centre-state finance topics.
The Finance Commission (constitutional, Art 280) is not the Planning Commission or NITI Aayog (executive bodies); its recommendations are advisory.
Art 280 constitutional body, set up every five years, recommending tax devolution between the Centre and States.