Q. With reference to the Finance Commission of India, consider the following statements:
1.The recommendations made by the Finance Commission are binding on the Government of India.
2.The Finance Commission recommends measures to augment the Consolidated Fund of a state to supplement the resources of panchayats and municipalities.
Which of the statements given above is/are correct?
Quarterly-SFG-Jan-to-March
Red Book

[A] 1 only

[B] 2 only

[C] Both 1 and 2

[D] Neither 1 nor 2

Answer: B
Notes:

Explanation:

  • The recommendations of the Finance Commission are advisory in nature and not binding on the Government of India.
  • The Finance Commission recommends measures to augment the Consolidated Fund of a state to supplement the resources of panchayats and municipalities, based on the recommendations of the State Finance Commission.

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