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What is true regarding sources of revenue in a federal system?
- a)States have no financial powers or independent sources of revenue.
- b)States are dependent for revenue or funds on the central government.
- c)Sources of revenue for each level of government are clearly specified to ensure its financial autonomy.
- d)States have no financial autonomy.
Correct answer is option 'C'. Can you explain this answer?
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Verified Answer
What is true regarding sources of revenue in a federal system?a)States...
The true statement is “Sources of revenue for each level of government are clearly specified to ensure its financial autonomy in a federal system.”
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Here is the explanation of all the options:
• Financial Powers: States do have financial powers or independent sources of revenue. State government revenue comes from income, sales, and other taxes; charges and fees; and transfers from the federal government.
• Independent Sources of Revenue: States are not dependent for revenue or funds on the central government and have independent sources of revenue mentioned above.
• Distribution of Powers: The federal form of government provides for the distribution of powers between the Central and State Governments. To ensure financial autonomy the sources of revenue for both the central government and state governments are clearly specified in the constitution, which implies their main sources of income.
Hence, the Correct Answer is C
States do have financial autonomy and are not dependent for revenue or funds.
You can go through the course of Indian Economy and can cover all the important aspects of Indian Economy from UPSC point of view through it.
Most Upvoted Answer
What is true regarding sources of revenue in a federal system?a)States...
Sources of revenue in a federal system
In a federal system, there are different levels of government, and each level has its own sources of revenue. The sources of revenue for each level of government are clearly specified to ensure its financial autonomy. The true statement regarding sources of revenue in a federal system is:
Option C: Sources of revenue for each level of government are clearly specified to ensure its financial autonomy.
Explanation:
In a federal system, there are different levels of government, such as the central government and the state government. Each level of government has its own sources of revenue. The sources of revenue for each level of government are clearly specified to ensure its financial autonomy. This means that each level of government can raise its own revenue and spend it according to its own priorities.
The sources of revenue for the central government include taxes, customs duties, and fees from public sector enterprises. The state government's sources of revenue include sales tax, excise duty, and stamp duty. The local government's sources of revenue include property tax, entertainment tax, and octroi.
The financial autonomy of each level of government is important in a federal system because it allows them to implement their own policies and programs without being dependent on another level of government. It also promotes healthy competition among the levels of government, which can lead to better governance and service delivery for the citizens.
Conclusion:
In a federal system, the sources of revenue for each level of government are clearly specified to ensure its financial autonomy. This allows each level of government to raise its own revenue and spend it according to its own priorities, promoting healthy competition and better governance.
In a federal system, there are different levels of government, and each level has its own sources of revenue. The sources of revenue for each level of government are clearly specified to ensure its financial autonomy. The true statement regarding sources of revenue in a federal system is:
Option C: Sources of revenue for each level of government are clearly specified to ensure its financial autonomy.
Explanation:
In a federal system, there are different levels of government, such as the central government and the state government. Each level of government has its own sources of revenue. The sources of revenue for each level of government are clearly specified to ensure its financial autonomy. This means that each level of government can raise its own revenue and spend it according to its own priorities.
The sources of revenue for the central government include taxes, customs duties, and fees from public sector enterprises. The state government's sources of revenue include sales tax, excise duty, and stamp duty. The local government's sources of revenue include property tax, entertainment tax, and octroi.
The financial autonomy of each level of government is important in a federal system because it allows them to implement their own policies and programs without being dependent on another level of government. It also promotes healthy competition among the levels of government, which can lead to better governance and service delivery for the citizens.
Conclusion:
In a federal system, the sources of revenue for each level of government are clearly specified to ensure its financial autonomy. This allows each level of government to raise its own revenue and spend it according to its own priorities, promoting healthy competition and better governance.
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Community Answer
What is true regarding sources of revenue in a federal system?a)States...
Option C is correct as states are given financial autonomy by giving them independency in revenue from central government.
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What is true regarding sources of revenue in a federal system?a)States have no financial powers or independent sources of revenue.b)States are dependent for revenue or funds on the central government.c)Sources of revenue for each level of government are clearly specified to ensure itsfinancial autonomy.d)States have no financial autonomy.Correct answer is option 'C'. Can you explain this answer?
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