Finance, Property, Contracts
(1) The President constitutes a Finance Commission (Chairman + 4 members) within 2 years of the Constitution's commencement, and every 5 years after (or earlier if needed). (2) Parliament may set members' qualifications and selection method. (3) The Commission recommends: Union-State and inter-State tax revenue distribution; grants-in-aid principles; measures to boost a state's Consolidated Fund to support its Panchayats and Municipalities (based on the State Finance Commission's own recommendations); and any other sound-finance matter the President refers. (4) The Commission sets its own procedure, with powers Parliament may confer.
This is one of India's most consequential fiscal-federalism institutions: every five years, an independent Finance Commission is convened specifically to recommend how tax revenue should be shared between the Union and states, and among the states themselves - a periodic, expert-driven review process rather than revenue-sharing being decided purely through ongoing political negotiation.
Each Finance Commission's report (like the 15th Finance Commission's recommendations) sets the actual percentage of central tax revenue devolved to states for the following five years - a hugely consequential number for every state government's budget planning.