Question

An SFC often recommends a system of incentive-based grants. What is the purpose of this?

• A. To provide financial assistance to all local bodies regardless of their performance.
• B. To penalize local bodies that fail to meet basic service delivery standards.
• C. To reward local bodies that perform well in service delivery and revenue collection.
• D. To fund infrastructure projects that have a low chance of successful completion.

Answer 1

Answer:

C. To reward local bodies that perform well in service delivery and revenue collection.

• Performance-based or incentive grants are a common tool recommended by SFCs to encourage better fiscal discipline, higher tax collection, and improved service delivery by local bodies.