Which of the following statements about the functions of the State Finance Commission is are correct...........

Indian Polity Commission/committee

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Which of the following statements about the functions of the State Finance Commission is/are correct?

1. It reviews the financial position of the local governments in the State.

2. It reviews the distribution of revenue between rural and urban local governments.

Select the correct answer using the code given below.

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EPFO APFC 2023

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1 only

2 only

Both 1 and 2

Neither 1 nor 2

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Explanation:

The State Finance Commission (SFC) is tasked with several functions concerning the fiscal administration of local governments:

1. Review of Financial Position: It assesses the financial status of local governments in the state, which includes both rural and urban entities, and suggests ways to improve it.

2. Distribution of Revenue: The SFC also examines and recommends the distribution of the net proceeds of financial resources between rural and urban local governments, ensuring equitable allocation for efficient functioning.

Both statements accurately describe the functions of the State Finance Commission.

Answer: Option 3 - Both 1 and 2