Panchayati Raj Instiutions

Indian Political System

Title

45:30

8 of 24 completed

5 of 15 completed

38 of 100 completed

8 of 20 completed

Indian Economy - Understanding the basics of Indian economic system

Consider the following statements about State Finance Commission under 73rd Amendment Act:

The composition and required qualification of this commission are decided by the Governor of the state.
It recommends to Governor the determination of fees that may be assigned to the panchayats.

Which of the statements given above is/are correct?

1 only

2 only

Both 1 and 2

Neither 1 nor 2

Under Article 243-I of the Constitution of India, the governor of a state is required to constitute a Finance Commission every five years.

The state legislature provides for the composition of commission, required qualifications of its members and manner of their selection.

Recommendations of SFC:

distribution of net proceeds of taxes, duties, tolls and fees levied by state, between state and panchayat.
determining taxes, duties, tolls and fees to be assigned to panchayats
grants in aid to panchayats from consolidated fund of state

The governor may place the recommendations of commission along with the action taken report before the state legislature.