(1) The Government shall, as soon as may be from the commencement of the Act, and thereafter at the expiration of every fifth year, constitute a “[x x x] Finance Commission for Panchayats and Municipalities” to review the financial position of Panchayats and Municipalities and to exercise the powers conferred upon and to perform the functions assigned to it, under the Act.
(2) The Commission shall consist of,––
(a) a Chairperson who shall be an eminent economist with expertise in State finance, planning, rural development, panchayats and local bodies ; and
(b) such other members, not exceeding two, as the Government may appoint from amongst persons of repute having excelled in administration, planning, panchayats, municipalities, legal or academic fields.
(3) The Chairperson and the Members shall be appointed by the Government by notification.
(4) There shall be a Secretary to the Commission who shall be the Chief Executive Officer of the Commission to be appointed by the Government.
(5) The Secretary shall exercise such powers and discharge such functions of the Commission as it may delegate to him.
(6) The headquarters of the Commission shall be at such place as the Government may determine.