The primary duty of the Finance Commission of India is

1. A

   To give the recommendations on distribution of tax revenue between the Union and States

   To give recommendations on distribution of tax revenue between the Union and the States is the primary constitutional duty of the Finance Commission of India. Article 280 requires the Commission to recommend the distribution of the net proceeds of taxes between the Union and the States and the allocation among the States of the respective shares. It also recommends principles of grants-in-aid from the Consolidated Fund of India. That vertical and horizontal sharing of resources is the core mandate, so this option is the official key.

2. B

   To prepare the Union Annual Budget

   To prepare the Union Annual Budget is the function of the Ministry of Finance, presented in Parliament by the Union Finance Minister. The Finance Commission does not draft or present the Annual Financial Statement. This option is therefore not the key.

3. C

   To advise the President on financial matters

   To advise the President on financial matters is too wide and is not the defined primary duty. The Commission submits its report to the President, who lays it before Parliament, but it is not a standing financial adviser on all matters. This option is therefore incorrect.

4. D

   To allocate funds to various Ministries/ Departments of the Union and State Governments

   To allocate funds to various Ministries and Departments of the Union and State Governments is an executive budget-and-accounts function, not a Finance Commission power. The Commission recommends shares and grants; it does not run departmental allotments. This option is not the key.

Summary. Official key is (a) To give the recommendations on distribution of tax revenue between the Union and States. Article 280 places tax-sharing and grants-in-aid at the centre of the Commission's work. The Union Budget is prepared by the Finance Ministry, not by the Commission. The Commission is not a general financial adviser to the President, nor does it allot ministry-wise funds. Only (a) states the primary duty correctly.