42 SOCIAL SCIENTIST states of the proceeds of certain taxes (Article 269 of the Constitution). (3) Through mandatory sharing of the proceeds of income tax on principles laid down by the Finance Commission (Article 270 of the Constitution). (4) Through sharing, on recommendation by the Finance Commission in the proceeds Of Union excise duties (Article 272 of the Constitution). (5) Through statutory grants-in-aid, on recommendations by the Finance Commission (Article 275 of the Constitution). (6) Through grants for any public purpose (Article 282 of the Constitution). (7) Through loans for any purpose (Article 293 of the Constitution). Finance Commissions' Role The sequence in the above scheme of resource transfers to the states is significant in two respects. Firstly, the mechanism of resource transfers relies principally on instruments of tax sharing and statutory grants-in-aid and only marginally on other grants and Central loans for the purpose. This is borne out by the fact that items (6) and (7) do not appear in the section of the Indian Constitution dealing with the distribution of revenues between the Union and the state. Secondly, the Finance Commissions has been assigned a major role in the scheme of fiscal relations envisaged under the Indian Constitution. To quote the Seventh Finance Commission : The meaning of the sequence is clear in that, firstly, the need of transfer of resources is recognised and made part of the Constitution; secondly, in the case of taxes which are to be divided or may be divided between the Centre and states, it is the Finance Commission which has to make recommendation in regard to the allocation of the icspective shares between the Union on the one hand and the states on the other and also in regard to the principles for deciding the shares of the states inter se. The Commission has also to recommend the principles which should govern the grants-in-aid to the states under Article 275. These two duties are mandatory. The Seventh Finance Commission goes on to elaborate what freedom a Finance Commission enjoys, in its judgement, in regard to matters which the Constitution enjoins upon this body to consider and make recommendations on. While the Commission's discretion in the matter of making recommendations on these matters (i.e. those which come within its purview under the Constitution) is not limited in the Constitution, it also seems plear that the Commission has little discretion to m^ transfers