Explanation: Mayo’s Resolution of 1870 financial decentralization was a legislative devolution inaugurated by the Indian Councils Act of 1861.

• Apart from the annual grant from imperial Government, the provincial governments were authorized to resort to local taxation to balance their budgets.
• This was done in context of transfer of certain departments of administration, such as medical services, education and roads, to the control of provincial governments. This was the beginning of local finance.
• Mayo’s Resolution emphasized, “Local interest, supervision and care are necessary for success in the management of the funds devoted to education, sanitation, medical relief and local public works.”

Source: Spectrum Modern India