The Finance Commission derives its authority from the
**Core Concept**
The Finance Commission is a constitutional body in India that plays a crucial role in determining the financial resources to be allocated to the states. The commission's primary function is to review the existing fiscal relations between the Centre and the states and make recommendations on the distribution of taxes and other financial resources.
**Why the Correct Answer is Right**
The Finance Commission derives its authority from Article 280 of the Indian Constitution, which mandates the establishment of a Finance Commission every five years to review the existing fiscal relations between the Centre and the states. The commission's recommendations are binding on the Centre and the states, and its decisions have a significant impact on the allocation of financial resources to the states. The commission's authority is also derived from the fact that it is a constitutional body, which gives it the power to make recommendations that are binding on the Centre and the states.
**Why Each Wrong Option is Incorrect**
**Option A:** This option is incorrect because the Planning Commission, which was abolished in 2015, was responsible for formulating plans for the overall development of the country, but it did not have the authority to distribute financial resources to the states.
**Option B:** This option is incorrect because the RBI's primary function is to regulate the monetary policy of the country, and it does not have the authority to distribute financial resources to the states.
**Option C:** This option is incorrect because the NITI Aayog, which was established in 2015, is a policy think tank that advises the government on various policy issues, but it does not have the authority to distribute financial resources to the states.
**Clinical Pearl / High-Yield Fact**
The Finance Commission's recommendations are a crucial factor in determining the financial resources allocated to the states, and its decisions have a significant impact on the development of the states.
**Correct Answer: D. Article 280 of the Indian Constitution.**