The correct answer is: A. Three years
The Finance Commission is a constitutional body constituted every five years to review the financial position of the Union and the States and to make recommendations to the President on the distribution of revenues between the Union and the States, the principles governing grants-in-aid to the States, and the measures needed to augment the Consolidated Fund of India.
The Finance Commission was first constituted in 1951. The present Finance Commission is the 15th Finance Commission, which was constituted in 2020. The Finance Commission is headed by a Chairman, who is a retired judge of the Supreme Court or the Chief Justice of a High Court. The other members of the Finance Commission are appointed by the President on the recommendation of the Prime Minister.
The Finance Commission submits its report to the President, who places it before the Parliament. The Parliament is not bound to accept the recommendations of the Finance Commission, but it usually does so. The recommendations of the Finance Commission are implemented by the Central Government and the State Governments.
The Finance Commission plays an important role in the financial management of the country. Its recommendations help to ensure that the resources of the country are used in a fair and equitable manner. The Finance Commission also helps to promote economic development and social justice in the country.
The following are the options for the question:
- A. Three years
- B. Six years
- C. Four years
- D. Five years
Option A is the correct answer. The Finance Commission is constituted every five years.