Under the Constitution of India, who appoints the Finance Commission that recommends the distribution of financial resources between the Union and the States?

Introduction / Context:
The Finance Commission of India is a constitutional body created to recommend how tax revenues should be shared between the Union and the States and among the States themselves. Its establishment at regular intervals is mandated by the Constitution so that Centre State financial relations remain balanced and updated. This question asks you to identify the authority that appoints the Finance Commission under the constitutional framework.

Given Data / Assumptions:

• The subject is the Finance Commission of India.
• Options list the RBI Governor, the CAG of India, the President of India, and the Union Finance Minister.
• We assume awareness that the Finance Commission is a constitutional body under Article 280.
• The focus is on who formally constitutes and appoints the Commission.

Concept / Approach:
Article 280 of the Constitution of India provides that the President shall, within two years from the commencement of the Constitution and thereafter at the expiration of every fifth year or at such earlier time as the President considers necessary, constitute a Finance Commission. This means that the authority to appoint the Chairman and members of the Finance Commission lies with the President of India. The Finance Minister may be involved in recommending names or receiving reports, but the formal appointment power is vested in the President, not in the RBI Governor or the CAG.

Step-by-Step Solution:
Step 1: Recall the wording of Article 280, which clearly says that the President shall constitute a Finance Commission.Step 2: Understand that constituting a commission includes appointing its Chairman and members.Step 3: Recognise that while the Union Finance Minister works closely with the Commission and presents its recommendations, the Minister is not the appointing authority under the Constitution.Step 4: Note that the RBI Governor and the CAG have their own statutory and constitutional roles but do not appoint the Finance Commission.Step 5: Select the President of India as the correct answer.

Verification / Alternative check:
Constitutional commentaries and polity textbooks always state that the Finance Commission is constituted by the President under Article 280. Government notifications announcing the formation of each Finance Commission are also issued in the name of the President. These notifications list the members and terms of reference, confirming that the appointment power rests with the President and not with other high offices mentioned in the options.

Why Other Options Are Wrong:

• Governor of RBI: The RBI Governor is responsible for monetary policy and banking regulation, not for appointing constitutional commissions on finance sharing.
• Comptroller and Auditor General of India: The CAG audits government accounts but does not constitute the Finance Commission.
• Union Finance Minister: The Finance Minister may propose terms of reference and interact with the Commission but is not the constitutional appointing authority.

Common Pitfalls:
Because the Finance Commission deals with financial matters, candidates sometimes assume that the Union Finance Minister or RBI Governor must appoint it. Another confusion is the similarity between financial oversight bodies such as the CAG and the Finance Commission. To avoid such mistakes, remember that the power to constitute major constitutional commissions, including the Finance Commission, typically lies with the President of India, acting on the advice of the Council of Ministers.

Final Answer:
The Finance Commission of India is constituted and its members are appointed by the President of India under Article 280 of the Constitution.