According to former Reserve Bank of India Governor,Finance Commission should be allowed to function in the same manner as it is doing currently.He said that the permanent structure would dilute the neutrality of the Finance Commission between the Union and the States through a process of continuous association with the government.
Earlier,Present RBI Governor had said that there is a need to give permanent status to the Finance Commission .
He said that Permanent Status for commission is needed as (a)there is a need to ensure consistency between finance commissions so that there is some certainty in the flow of funds to states and (b)The finance commission can function as a leaner entity in the intervening period until the next finance commission is set up in a full-edged manner.
The first Finance Commission was established by the President of India in 1951 under Article 280 of the Indian Constitution.It defines the financial relations between the Central Government of India and the individual state governments.
The Commission is appointed every five years.It consists of a Chairman and four other members.The Chairman of the 15th finance commission is chaired by N. K.Singh.