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Indian EconomyHard

Who was the chairman of the first Finance Commission of India, constituted in 1951?

  1. A.C. D. Deshmukh
  2. B.Santhanam
  3. C.A. K. Chanda
  4. D.K. C. Neogy

Correct answer

D. K. C. Neogy

Explanation

The correct answer is D, K. C. Neogy. K. C. Neogy chaired the first Finance Commission, which was constituted in 1951 under Article 280 soon after the Constitution came into force, and whose recommendations covered the sharing of income tax and union excise duties with the States. Option A is wrong because C. D. Deshmukh was Union Finance Minister in that period and later Governor of the Reserve Bank of India, but he did not chair the Commission. Option B is wrong because K. Santhanam chaired the second Finance Commission, not the first. Option C is wrong because A. K. Chanda chaired the third Finance Commission and is better remembered as a Comptroller and Auditor General of India. Remembering Neogy for the first and Santhanam for the second is enough for most papers.

Read the full article: Public Finance and Finance Commission: Articles and Deficits

Practice Questions

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Q1.Indian EconomyEasy

Which article of the Constitution of India provides for the constitution of a Finance Commission?

  1. A.Article 112
  2. B.Article 266
  3. C.Article 280
  4. D.Article 324
Show answer
Correct answer: C. Article 280

Article 280 requires the President to constitute a Finance Commission at the expiration of every fifth year, or earlier if the President considers it necessary, consisting of a Chairman and four other members, and lists the matters on which it is to make recommendations.

Q2.Indian EconomyAsked in: SSC CGL · 20 Jul 2023, Shift 4Hard

Which of the following statements is/are correct regarding the Finance Commission of India? A. The Finance Commission consists of a Chairman and four other members. B. The recommendations made by the Finance Commission are binding on the government and the government needs to grant funds according to the advice of the Commission. C. Article 280 of the Indian Constitution talks about the recommendations of the Finance Commission.

  1. A.A and B only
  2. B.A, B and C
  3. C.A and C only
  4. D.B and C only
Show answer
Correct answer: C. A and C only

Statement A is correct: Article 280 provides that the Commission shall consist of a Chairman and four other members appointed by the President.

Q4.Indian EconomyMedium

Fiscal deficit of the Government of India is best defined as:

  1. A.Revenue expenditure minus revenue receipts
  2. B.Total expenditure minus total receipts other than borrowings
  3. C.Total expenditure minus interest payments
  4. D.Capital expenditure minus capital receipts
Show answer
Correct answer: B. Total expenditure minus total receipts other than borrowings

Fiscal deficit measures the whole amount the government must borrow in a year, because it compares everything it spends with everything it earns from taxes, non-tax revenue, recovery of loans and disinvestment, leaving borrowing out of the receipts side.

Q5.Indian EconomyAsked in: Uttar Pradesh · 22 Dec, 2018, Shift 1Medium

According to Article 243-I of the Constitution of India, a Finance Commission is constituted to review the financial position of the Panchayats:

  1. A.at the expiration of every sixth year
  2. B.at the expiration of every fifth year
  3. C.at the expiration of every second year
  4. D.at the expiration of every third year
Show answer
Correct answer: B. at the expiration of every fifth year

Article 243-I, inserted by the seventy-third Constitutional Amendment of 1992, requires the Governor of a State to constitute a Finance Commission at the expiration of every fifth year to review the financial position of the Panchayats and to recommend how taxes, duties, tolls and fees should be divided between the…