Concept:Article 280(1) of the Constitution of India deals with the periodic constitution of the Finance Commission by the President.
Explanation:According to Article 280(1), the President of India shall constitute a Finance Commission within two years from the commencement of the Constitution.
Thereafter, the Commission must be constituted at the expiration of every fifth year.
However, the President may also constitute it at such earlier time as he considers necessary.
Thus, the Finance Commission is not a permanent body but is constituted periodically.
The Commission is a quasi-judicial body that recommends the distribution of net proceeds of taxes between the Union and the States.
It also determines the principles governing Grants-in-aid to the States from the Consolidated Fund of India under Article 275.
The Finance Commission (Miscellaneous Provisions) Act, 1951, lays down the qualifications, appointment, and powers of the Chairman and other members.
The Chairman must be a person having experience in public affairs.
The Commission addresses vertical and horizontal imbalances in the distribution of financial resources between the Centre and the States.
Answer:As per Article 280(1) of the Constitution, the Finance Commission is to be constituted every five years or earlier.
Therefore, the correct option is C.