Finance Commission and the devolution formula

Article 280 requires the President to constitute a Finance Commission every fifth year to recommend how net proceeds of Union taxes are divided between the Union and the States, how that share is distributed among States, and principles governing grants-in-aid under Article 275. Equity criteria such as income distance pull against performance criteria such as demographic change, forest cover, and tax effort, and no weighting satisfies both. Article 281 requires recommendations and action taken to be laid before Parliament; they are advisory but accepted by convention.