UPSC Civil Services Model Paper 7

The Finance Commission (FC) was established by the President of India in 1951 under Article 280 of the Indian Constitution As per the Constitution, the FC is appointed every five years and consists of a chairman and four other members .
Hence Statement A is Correct.
The first FC was established in 1951 by Dr. B.R. Ambedkar, the then-incumbent law minister , to address these imbalances.
The FC functions are-
1. Distribution of net proceeds of taxes between Center and the States , to be divided as per their respective contributions to the taxes.
2. Determine factors governing Grants-in-Aid to the states and the magnitude of the same .
3. To make recommendations to the president as to the measures needed to augment the 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 FC of state.
4. Any other matter related to it by the president in the interest of sound finance .
Members of the Finance Commission
1. Judges of a high court,
2. Have knowledge of government finances or accounts, or
3. Have had experience in administration and financial expertise; or
4. Have special knowledge of economics
Recently 15th FC was constituted under the Presidentship of N. K. Singh.
Hence statement C is Incorrect.
In 15th FC Demographic Performance and Tax efforts are the parameters used the first time.
Hence Statement B is Correct.