Q. With reference to the State Finance Commission, consider the following statements:
1. It is a permanent body constituted by the President.
2. The composition of the commission is determined by the State Legislature concerned.
3. It makes recommendations regarding grants-in-aid to the municipalities from the Consolidated Fund of State.
4. Tolls and fees to be assigned to the Panchayats are outside the purview of SFC.
How many statements given above are correct?
Exp) Option b is the correct answer.
Statement 1 is incorrect. The State Finance Commission is not a permanent body. Under Article 243-I of the Constitution of India, the Governor of a state is required to constitute a Finance Commission every five years. This is in order to decide the resource allocation between the state government and the Panchayati Raj Institutions.
Statement 2 is correct. The state legislature may provide for the composition of the commission, the required qualifications of its members and the manner of their selection.
Statement 3 is correct. State Finance Commission review the financial position of municipalities and make recommendation regarding grants-in-aid to the municipalities from the Consolidated Fund of State.
Statement 4 is incorrect. The recommendations made by the Finance Commission includes the determination of the taxes, duties, tolls and fees which may be assigned as, or appropriated by, the Panchayats.
