Finance Commission of the state shall make which of the following recommendations to the Governor Th...........

Indian Polity Constitutional Bodies

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Finance Commission of the state shall make which of the following recommendations to the Governor?

The principles that should govern the distribution between the state and the panchayats of the net proceeds of the taxes
The principles that should govern the determination of taxes and fees that may be assigned to the panchayats.
The principles that should govern the grants-in-aid to the panchayats from the consolidated fund of India.
The measures needed to improve the financial position of the panchayats.

Choose the correct statements

1, 2 and 3

2 and 4

1, 2 and 4

1, 2, 3 and 4

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Explanation:

Statement 3 is incorrect because, State Finance commission deals with state, so cannot appropriate funds from consolidated fund of India.

Under Article 243-I of the Indian Constitution, the governor of a state ensures the laying of a State Finance Commission’s recommendations to the table of the state legislature.

A State Finance Commission reviews the financial position of the panchayats in a state and makes recommendations to the Governor about the principles that should govern the distribution of tax proceeds – taxes, duties, levies, toll fee collected by the state between the state and its Panchayati Raj Institutions at all three levels – village level, block level and district level.

It also recommends the following:

Taxes, levies and fees levied or appropriated by Panchayats themselves.
Grants-in-aid to Panchayati Raj Institutions from the consolidated fund of a state.
Ways to improve the financial position of the Panchayati Raj Institutions.
Measures for the overall improvement of Panchayat’s finances.