Q. Consider the following statements regarding sources of revenue for Urban Local Bodies (ULBs):
1. Property tax is the most important source of tax revenue for municipalities.
2. Urban local bodies can raise loans from financial institutions without requiring approval from the state government.
3. The devolution of funds to ULBs is based on the recommendations of the State Finance Commission.
Which of the statements given above is/are correct?
Answer: B
Notes:
Explanation:
- Property tax is indeed the most important and consistent source of tax revenue for municipal bodies.
- Urban local bodies require state government approval to raise loans from financial institutions or other bodies.
- Devolution of funds is based on the recommendations of the State Finance Commission.
Source: Laxmikant (Polity)
