Chapter XII Article 280 of the Indian constitution provides for the Finance Commission in India. This article, says that the President within two years of the commencement of the constitution and there after every five years or at such earlier times will constitute the finance commission.
Composition of Finance Commission: The Finance Commission shall consist of one chairman and four other members. The Chairman of the fourteenth Finance Commission is Dr. Y.V. Reddy. The other members of the commission are Professor Abhijit Sen, Dr. M. Govinda Rao, Ms. Sushama Nath and Dr. Sudipto Mundle. The secretary of the commission is Mr. Ajay Narayan Jha.
The constitution of India empowers the Parliament for lay down the qualifications, disqualifications and the mode of appointment of members of the Commission.
Accordingly, the first Finance Commission (Miscellaneous Provisions) Act, was passed in 1951 which is amended in 1955. This Act lays down the qualification and disqualification of the chairman and members of the Finance Commission.
Qualifications: The chairman shall be appointed from among persons of public eminence and the four members should be:
qualified to become the judges of the High Court, or
have special knowledge of finances and accounts of the Government, or
have wide experience in financial administrative or economic affairs.
The President must see before appointment of any member that he does not have any financial or other interest that will prejudice his functions as a member of the finance commission.
Disqualifications: A person is disqualified to become a member of the Finance commission if:
the person is mentally unsound, or
the person is an undischarged insolvent, or
the person has been convicted and found guilty of immoral offence, or
the person has such interests (including financial interest) that may be detrimental for the effective functioning of the commission.
The Act also provides that the commission shall determine its own procedure and it shall have the power of a civil court. It may summon any person or authority to furnish any such information as may be essential for its own work.
Also read: Importance and role of Finance Commission In India