About Finance Commission 

• The Finance Commission is a constitutional body set up under Article 280 of the Constitution. 
• Under Article 280, the President of India is required to constitute a Finance Commission at an interval of five years or earlier. 

What are the qualifications for Members?

• The Finance Commission has a chairman and four members appointed by the President.
• The Chairman of the Commission is selected from among persons who have had experience in public affairs, and the four other members are selected from among persons who–
  • are, or have been, or are qualified to be appointed as Judges of a High Court; or
  • have special knowledge of the finances and accounts of Government; or
  • have had wide experience in financial matters and in administration; or
  • have special knowledge of economics

What are the functions of the Finance Commission?

• It is the duty of the Commission to make recommendations to the President as to—  
  • the distribution of tax proceeds between the Union and the States and the share of each state.
  • the principles which should govern the grants-in-aid of the revenues of the States out of the Consolidated Fund of India;
  • the measures needed to augment the Consolidated Fund of a State to supplement the resources of the Panchayats in the State on the basis of the recommendations made by the Finance Commission of the State;
  • the measures needed to augment the Consolidated Fund of a State to supplement the resources of the Municipalities in the State on the basis of the recommendations made by the Finance Commission of the State;
  • any other matter referred to the Commission by the President in the interests of sound finance.

Why in News?

• The Union Cabinet has approved the creation of three posts at the level of Joint Secretary i.e. two posts of Joint Secretary and one post of Economic Adviser for the 16th Finance Commission, which was constituted in pursuance of Article 280 of the Constitution vide Notification dated 31st December, 2023. 
• The newly created posts are required to assist the Commission in carrying out its functions. All other posts in the Commission have already been created as per the delegated powers.

https://pib.gov.in/PressReleasePage.aspx?PRID=1997195