Which commission recommended reforms in Centre-State financial relations?

The correct option is Sarkaria Commission.

Step-by-Step Explanation:

1. Background of the Sarkaria Commission:
The Sarkaria Commission was set up by the Central Government of India in June 1983. It was chaired by Justice R. S. Sarkaria, a retired judge of the Supreme Court of India.

2. Objective and Mandate:
The primary objective of the commission was to examine and review the working of existing arrangements between the Union (Centre) and States in all spheres, including financial, legislative, and administrative relations, and to recommend appropriate changes and measures.

3. Key Recommendations on Financial Relations:
The commission submitted its final report in 1988, making important recommendations to improve Centre-State financial arrangements. Some key highlights include:
- Devolving taxation powers and ensuring proper sharing of revenue resources between the Centre and the States.
- Ensuring that taxation laws pass through proper consultation with the States to avoid friction.
- Reviewing the role of institutions handling resource transfers so that States remain financially viable and autonomous.

4. Analysis of Other Options:
- Finance Commission: While the Finance Commission (constituted under Article 280 of the Constitution) recommends the distribution of tax revenues between the Centre and States periodically, it is a permanent constitutional body rather than a specific reform commission set up to overhaul Centre-State relations as a whole.
- Planning Commission: Its primary role was to formulate India's Five-Year Plans for economic development, not specifically to recommend reforms in Centre-State financial relations.
- Election Commission: Responsible for conducting free and fair elections in India, having no role in Centre-State financial relations.

Hence, the Sarkaria Commission is the commission that recommended comprehensive reforms in Centre-State relations, including financial relations.