Which of the foil!owing is/are the function/ functions of the Finance Commission of India? 1. Making recommendations as to the principles governing grant-in-aid of the revenues of the States. 2. To suggest measures to augment Consolidated Fund of India. Select the correct answer using the code given below :

Under Article 280 of the Constitution, the Finance Commission is mandated to recommend the principles governing grants-in-aid of the revenues of the States out of the Consolidated Fund of India [c1, c3, t5]. This confirms Statement 1 is a core function. Regarding Statement 2, the Commission's constitutional duty is to suggest measures to augment the Consolidated Fund of a State to supplement the resources of local bodies (Panchayats and Municipalities) based on State Finance Commission recommendations [c5, t1, t7]. It does not have a mandate to suggest measures to augment the Consolidated Fund of India itself; rather, it recommends the distribution of proceeds from that fund. Therefore, Statement 2 is technically incorrect as it misidentifies the specific fund (State vs. India) intended for augmentation in this context. Consequently, only the first statement is correct.

Sources

1. [1] Laxmikanth, M. Indian Polity. 7th ed., McGraw Hill. > Chapter 46: Finance Commission > FUNCTIONS > p. 431
2. [2] Laxmikanth, M. Indian Polity. 7th ed., McGraw Hill. > Chapter 15: Centre State Relations > I I Finance Commission > p. 156
3. [3] Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 4: Government Budgeting > 1. Finance Commission Grants > p. 182
4. [4] https://www.hansrajcollege.ac.in/hCPanel/uploads/elearning/elearning_document/G_E_Public_Finance,_B_Com_(H)_4th_Sem-Part-B-Unit-1-14th_Finance_Commission_Report-_Chapter-14th.pdf
5. [5] https://fincomindia.nic.in/about-us