The Finance Commission submits its recommendations to the President. The recommendations are based on various factors, including:
- The need for resources by the States for their development plans.
- The need for resources by the Union to meet its expenditure.
- The impact of the recommendations on the consolidated fund of the Union.
The recommendations of the Finance Commission are not binding on the government, but they are generally accepted and form the basis for the distribution of financial resources between the Union and the States.
