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The state legislature may:
1. Authorise a panchayat to levy, collect and appropriate taxes, duties, tolls and fees
2. Assign to a panchayat taxes, duties, tolls and fees levied and collected by the state government
3. Provide for making grants-in-aid to the panchayats from the consolidated fund of the state
Which of these statements is/are correct?
  • a)
    1 and 2 Only
  • b)
    2 and 3 Only
  • c)
    1 and 3 Only
  • d)
    All of them
Correct answer is option 'D'. Can you explain this answer?
Verified Answer
The state legislature may:1. Authorise a panchayat to levy, collect a...
The state legislature may 
(a) authorize a panchayat to levy, collect and appropriate taxes, duties, tolls and fees; 
(b) assign to a panchayat taxes, duties, tolls and fees levied and collected by the state government; 
(c) provide for making grants-in-aid to the panchayats from the consolidated fund of the state; and 
(d) provide for the constitution of funds for crediting all money of the panchayats.
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Most Upvoted Answer
The state legislature may:1. Authorise a panchayat to levy, collect a...
The correct answer is option 'D', i.e., all of them.

Explanation:

The Constitution of India provides for a three-tier system of Panchayati Raj Institutions (PRIs) in the rural areas, with the objective of ensuring democratic decentralisation. The PRIs are vested with the powers and authority to plan and implement programs for economic development and social justice in the rural areas.

The state legislature has the power to make laws with respect to PRIs. The following are the powers of the state legislature regarding PRIs:

1. Authorise a panchayat to levy, collect and appropriate taxes, duties, tolls and fees:

The state legislature has the power to authorise a panchayat to levy, collect and appropriate taxes, duties, tolls and fees. This power is provided under Article 243H of the Constitution. The taxes, duties, tolls and fees that can be levied by a panchayat include:

- Property tax
- Water tax
- Entertainment tax
- Professional tax
- Toll tax
- Vehicle tax
- Market fee
- License fee
- Building permission fee
- Fines and penalties

These taxes and fees are collected by the panchayat and are used for the development of the rural areas.

2. Assign to a panchayat taxes, duties, tolls and fees levied and collected by the state government:

The state legislature has the power to assign to a panchayat taxes, duties, tolls and fees levied and collected by the state government. This power is provided under Article 243I of the Constitution. The taxes, duties, tolls and fees that can be assigned to a panchayat include:

- Land revenue
- Taxes on agricultural income
- Taxes on professions, trades, callings, and employments
- Excise duties
- Stamp duties
- Vehicle tax
- Entertainment tax
- Sales tax

These taxes and fees are collected by the state government and are transferred to the panchayat for the development of the rural areas.

3. Provide for making grants-in-aid to the panchayats from the consolidated fund of the state:

The state legislature has the power to provide for making grants-in-aid to the panchayats from the consolidated fund of the state. This power is provided under Article 243X of the Constitution. The grants-in-aid are given to the panchayats for the purpose of:

- Meeting the cost of preparing and implementing development plans
- Meeting the cost of providing basic services to the rural areas
- Meeting the cost of performing statutory functions

The grants-in-aid are given based on the recommendations of the State Finance Commission.

Therefore, all the statements provided in the question are correct, and the correct option is 'D', i.e., all of them.
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The state legislature may:1. Authorise a panchayat to levy, collect and appropriate taxes, duties, tolls and fees2. Assign to a panchayat taxes, duties, tolls and fees levied and collected by the state government3. Provide for making grants-in-aid to the panchayats from the consolidated fund of the stateWhich of these statements is/are correct?a) 1 and 2 Onlyb) 2 and 3 Onlyc) 1 and 3 Onlyd) All of themCorrect answer is option 'D'. Can you explain this answer?
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