Part XII: Finance, Property, Contracts and Suits

Article 281: Recommendations of the Finance Commission

Original Article:

The President shall cause every recommendation made by the Finance Commission under the provisions of this Constitution together with an explanatory memorandum as to the action taken thereon to be laid before each House of Parliament.

Explanations:

Article 281 ensures transparency and accountability in the financial recommendations of the Finance Commission. By mandating the presentation of these recommendations and the corresponding action taken to Parliament, it reinforces democratic oversight of fiscal policies.

Clause-by-Clause Explanation:

Transparency in Recommendations

Every recommendation of the Finance Commission must be presented to Parliament, ensuring legislative oversight and accountability. This strengthens the role of Parliament in fiscal decision-making, providing checks and balances on the executive's financial policies.

Example: When the 15th Finance Commission recommended increasing state shares in tax revenue, Parliament extensively discussed its impact on federal fiscal balance and overall economic growth.

Explanatory Memorandum

An explanatory memorandum must accompany the recommendations, detailing the action taken. This promotes transparency and informs both lawmakers and the public about the implementation of fiscal decisions.

Example: The explanatory memorandum for the 14th Finance Commission included detailed accounts of its recommendations on Panchayat funding and how states utilized these funds for rural development.

Legislative History:

Article 281 was initially introduced as Article 261 in the Draft Constitution. It was finalized as Article 281 after deliberations highlighting the need for transparency in fiscal matters. The framers emphasized the role of Parliament in overseeing the execution of Finance Commission recommendations, ensuring financial fairness across states.

Debates and Deliberations:

The Constituent Assembly extensively debated Article 261, emphasizing the importance of transparency and accountability in fiscal governance. Dr. B.R. Ambedkar argued that presenting the Finance Commission's recommendations to Parliament would ensure informed legislative scrutiny and prevent arbitrary financial decisions by the executive.

Shri H.V. Kamath suggested amendments empowering Parliament to amend these recommendations. However, these were rejected to maintain the Finance Commission's independence as an advisory body, free from political interference.

Other members, such as Prof. Shibban Lal Saksena, highlighted the importance of the explanatory memorandum in promoting accountability, ensuring that the executive’s actions aligned with the Commission's expert recommendations.

Frequently Asked Questions (FAQs):

References:

• "The Constitution of India" - Government Publications
• Reports of the Finance Commission - Ministry of Finance
• Constituent Assembly Debates - Historical Archives
• Analysis of the 15th Finance Commission Recommendations - Indian Journal of Public Administration
• Legislative Review of Fiscal Federalism - Law and Policy Brief
• Key Judgments on Finance Commission Roles - Supreme Court Cases Journal
• Historical Analysis of Financial Governance in India - Policy Research Institute