Consider the following about the State Finance Commission SFCs 1 It is constituted every five years ...........

Indian Polity Others

Consider the following about the State Finance Commission (SFCs).

1) It is constituted every five years by the Union Finance Commission (UFC).

2) It reviews the financial position of the Panchayats and Municipalities and recommends distribution of resources from state exchequer.

3) The Governor is required to cause every recommendation made by the SFC with an explanatory memorandum, as to the action taken thereon, before the Legislature of the State.

Select the Solution using the codes below.

1 and 2 only

2 and 3 only

1 and 3 only

1, 2 and 3

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Explanation:

Statement 1: The governor of a state, after every five years, constitutes a finance commission to review the financial position of the Panchayats. It is not the UFC that constitutes it. It makes recommendations to the Governor as to the principles which should govern. The distribution between the State and the Panchayats of the net proceeds of the taxes, duties, tolls and fees leviable by the State, which may be divided between them under this Part and the allocation between the Panchayats at all levels of their respective shares of such proceeds; The determination of the taxes, duties, tolls and fees which may be assigned as, or appropriated by, the Panchayats; The grants-in- aid to the Panchayats from the Consolidated Fund of the State; The measures needed to improve the financial position of the Panchayats;