Question

Choose the correct statement(s) concerning the composition and member appointments of the SFC.

1. The State Finance Commission must consist of exactly three members, including the chairman, all of whom serve on a full-time basis.

2. One member of the commission is required to have specialized knowledge in economics, while the other two must have experience in public or local administration or government accounts.

• A. 1 only
• B. 2 only
• C. Both 1 and 2
• D. Neither 1 nor 2

Answer 1

Answer:

B. 2 only

• The State Finance Commission (SFC) is a constitutional body established under Article 243-I of the Constitution of India.
• It is constituted to review the financial position of Panchayats and Municipalities and to recommend the distribution of taxes, duties, tolls, and fees between the State and the Panchayats/Municipalities.
• The composition of the SFC is determined by the State Legislature. There is no fixed number of members prescribed by the Constitution.
• A State Legislature can decide the number of members, their qualifications, and the manner of their appointment.
• Typically, an SFC consists of a Chairman and four other members. However, this is not a rigid rule and can vary from state to state.
• Members of the SFC are usually appointed by the Governor of the state.
• The qualifications and eligibility criteria for the members are also decided by the State Legislature. Often, the criteria include expertise in public finance, economics, administration, and accounts.
• Unlike some other commissions, the SFC members do not necessarily have to serve on a full-time basis, though this can be decided by the state legislature.
• The question states that the SFC must consist of *exactly* three members and that all serve on a *full-time* basis, which is not a constitutional mandate and therefore incorrect.
• The second statement suggests a specific requirement for specialized knowledge in economics and experience in public administration or government accounts. While the exact number and specific roles might vary, the general intent is to have members with diverse expertise relevant to fiscal matters, which aligns with the spirit of the SFC's role. This makes statement 2 more plausible in its general description of the type of expertise required, even if the exact composition is state-specific.