The Central Finance Commission is a constitutionally mandated commission that has the key function of recommending how financial resources will be shared between the central governments and state governments, and between individual state governments. It is constituted every five years, generally for a two year term, and is also required to make recommendations on strengthening financial resources of panchayats and municipalities (also known as urban local bodies). The Finance Commission’s terms of reference are drawn up by the central government, but its report is required to be tabled in Parliament. Generally the Finance Commission submits a single report sometime during Oct-Dec for five…
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