The correct answer is To give recommendations on the distribution of tax revenue between the Union and States. Explanation & Key Takeaways: • The Finance Commission is constituted by the President under Article 280 of the Constitution, mainly to give its recommendations on the distribution of tax revenues between the Union and the States and amongst the States themselves. • Two distinctive features of the Commission’s work involve- • redressing the vertical imbalances between the taxation powers and expenditure responsibilities of the centre and the States respectively • equalization of all public services across the States. • The recommendations of the Finance Commission are implemented as under- • Those to be implemented by an order of the President: The recommendations relating to the distribution of Union Taxes and Duties and Grants-in-aid fall in this category. • Those to be implemented by executive orders: Other recommendations to be made by the Finance Commission, as per its Terms of Reference