Q. Which of the following statements is/ are correct regarding the State Finance Commission?
1. It recommends the principles that govern the grants-in-aid to the panchayats from the Consolidated Fund of India.
2. It has the function of the determination of taxes, duties, tolls and fees that may be assigned to the panchayats.
3. It is to be constituted by the governor of a state after every five years.
Select the correct answer using the code given below.
Answer: C
Notes:
Exp) Option c is the correct answer.
Statement 1 is incorrect. The State Finance Commission recommends the principles that govern the grants-in-aid to the panchayats from the Consolidated Fund of the State and not from the Consolidated fund of India.
Statement 2 is correct. State Finance commission has function of the determination of taxes, duties, tolls and fees that may be assigned to the panchayats.
Statement 3 is correct. Under Article 243-I of the Constitution of India, the governor of a state is required to constitute a Finance Commission every five years.
