Composition and Recommendations — Amendments

Amendment	Year	Description	Impact
73rd Amendment	1992	Added Article 280(3)(c) requiring Finance Commission to recommend measures for augmenting state finances to support Panchayats based on State Finance Commission recommendations. This expanded the Commission's mandate to include local governance financing.	Significantly expanded Finance Commission's role in three-tier federalism, making it responsible for ensuring adequate funding for grassroots democracy. This amendment required Finance Commissions to include expertise in local governance and rural development.
74th Amendment	1992	Extended the Finance Commission's mandate to include recommendations for augmenting state resources for Municipalities, similar to Panchayats. This amendment made urban local governance financing part of the Commission's constitutional responsibility.	Created comprehensive local body financing framework through Finance Commission recommendations, requiring expertise in urban governance and municipal finance. This amendment made the Commission a key institution for three-tier fiscal federalism in India.

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