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-With reference to State Finance Commission, consider the following statements.
1. It is constituted by the President to make Panchayati Raj Institutions financially less dependent on state
government.
2. The recommendations of state finance commission include the principles that should govern the
determination of taxes, duties that may be assigned to Panchayats.
3. It has constitutional status.
Which of the above statements is/are correct?
  • a)
    1 and 2
  • b)
    2 and 3
  • c)
    1 and 3
  • d)
    1, 2 and 3
Correct answer is option 'B'. Can you explain this answer?
Verified Answer
-With reference to State Finance Commission, consider the following st...
According to article 243, State finance commission is constituted by Governor of state. So option (1) is incorrect.
The functions of state finance commission are:
1. The distribution between the State and the Panchayats of the net proceeds of the taxes, duties, tolls and
fees levied by the State, which may be divided between them under this Part and the allocation between
the Panchayats at all levels of their respective shares of such proceeds;
2. The determination of the taxes, duties, tolls and fees which may be assigned as, or appropriated by, the
Panchayats;
3. The grants-in-aid to the Panchayats from the Consolidated Fund of the State;
So option (2) is correct.
Article 243I of the Indian Constitution prescribes that the Governor of a State shall, as soon as may be within one
year from the commencement of the Constitution (Seventy-third Amendment) Act, 1992, constitute the SFC.
Thus it has constitutional status.
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Most Upvoted Answer
-With reference to State Finance Commission, consider the following st...
State Finance Commission

The State Finance Commission is a constitutional body that is constituted by the President to make recommendations on the distribution of tax revenues between the State government and the Panchayati Raj Institutions (PRIs).

Functions

The main functions of the State Finance Commission are:

1. To examine the financial position of the PRIs and make recommendations on the measures needed to improve their financial situation.

2. To recommend the principles that should govern the determination of taxes, duties, tolls, and fees that may be assigned to the PRIs.

3. To recommend the grants-in-aid that may be given to the PRIs from the Consolidated Fund of the State.

Constitutional status

The State Finance Commission has been given constitutional status under Article 243I of the Indian Constitution. This means that it is a permanent body that is mandated to be set up every five years to make recommendations on the financial devolution to the PRIs.

Conclusion

In conclusion, the correct statements with regards to the State Finance Commission are:

1. The Commission is constituted by the President to make recommendations on the distribution of tax revenues between the State government and the PRIs.

2. The recommendations of the State Finance Commission include the principles that should govern the determination of taxes, duties, tolls, and fees that may be assigned to the PRIs.

3. The State Finance Commission has constitutional status under Article 243I of the Indian Constitution.
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-With reference to State Finance Commission, consider the following statements.1. It is constituted by the President to make Panchayati Raj Institutions financially less dependent on stategovernment.2. The recommendations of state finance commission include the principles that should govern thedetermination of taxes, duties that may be assigned to Panchayats.3. It has constitutional status.Which of the above statements is/are correct?a)1 and 2b)2 and 3c)1 and 3d)1, 2 and 3Correct answer is option 'B'. Can you explain this answer?
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-With reference to State Finance Commission, consider the following statements.1. It is constituted by the President to make Panchayati Raj Institutions financially less dependent on stategovernment.2. The recommendations of state finance commission include the principles that should govern thedetermination of taxes, duties that may be assigned to Panchayats.3. It has constitutional status.Which of the above statements is/are correct?a)1 and 2b)2 and 3c)1 and 3d)1, 2 and 3Correct answer is option 'B'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about -With reference to State Finance Commission, consider the following statements.1. It is constituted by the President to make Panchayati Raj Institutions financially less dependent on stategovernment.2. The recommendations of state finance commission include the principles that should govern thedetermination of taxes, duties that may be assigned to Panchayats.3. It has constitutional status.Which of the above statements is/are correct?a)1 and 2b)2 and 3c)1 and 3d)1, 2 and 3Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for -With reference to State Finance Commission, consider the following statements.1. It is constituted by the President to make Panchayati Raj Institutions financially less dependent on stategovernment.2. The recommendations of state finance commission include the principles that should govern thedetermination of taxes, duties that may be assigned to Panchayats.3. It has constitutional status.Which of the above statements is/are correct?a)1 and 2b)2 and 3c)1 and 3d)1, 2 and 3Correct answer is option 'B'. Can you explain this answer?.
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