Finance Commission was formed under article 280 of the constitution.  The first Finance Commission was set up in the year 1951 and K.C, Niyogi was appointed the Chairman.  President has the authority to appoint a Finance Commission.  It is a constitutional body which defines the centre-state federal relation.  Its primary task is to recommend division of States’ revenues collected by the Centre of the divisibility pool between the centre and the states and the share to be allocated to each state.  One of the important responsibilities of the Finance Commission is to take measures needed to augment the Consolidated Fund of a State to supplement the resources of the Panchayats and Municipalities in the State on the basis of the recommendations made by the Finance Commission of the State.

So far 14 finance commissions have been appointed.


Finance Commission Chairman Years of Establishment Duration
I K C Niyogi 1951 1952–57


K Santhanam 1956 1957–62
III A K Chanda 1960 1962–66
IV P V Rajamannar 1964 1966–69
V Mahaveer Tyagi 1968 1969–74
VI Brahma Nand Reddy 1972 1974–79
VII  J M Shellet 1977 1979–84
VIII Y B Chawan 1983 1984–89
IX N K P Salve 1987 1989–95
X K C Pant 1992 1995–2000
XI A M Khusro 1998 2000–2005
XII C Rangarajan 2003 2005–2010
XIII Vijay Kelkar 2009 2010–2015
XIV Y V Reddy 2013 2015–2020