According to article 280 of Indian constitution, Finance Commission consists of a Chairman and four other members to be appointed by the President.
The Commission will make recommendations to the President as to—
(a) The distribution between the Union and the States of the net proceeds of taxes which are to be, or may be, divided between them and the allocation between the States of the respective shares of such proceeds;
(b) The principles which should govern the grants-in-aid of the revenues of the States out of the Consolidated Fund of India;
(c) The measures needed to augment the Consolidated Fund of a State to supplement the resources of the Panchayats in the State on the basis of the recommendations made by the Finance Commission of the State;
(d) The measures needed to augment the Consolidated Fund of a State to supplement the resources of the Municipalities in the State on the basis of the recommendations made by the Finance Commission of the State
(e) Any other matter referred to the Commission by the President in the interests of sound finance.
According to article 281 of the Indian constitution the President shall cause every recommendation made by the Finance Commission under the provisions of this Constitution together with an explanatory memorandum as to the action taken thereon to be laid before each House of Parliament.