Question

Choose the correct statement(s) regarding the composition and tenure of the State Finance Commission.

i) Members of the State Finance Commission are appointed by the Governor and are eligible for reappointment.

ii) The Commission must include at least one member with experience in local administration.

iii) The Chairman of the State Finance Commission must be a retired judge of the High Court.

iv) A member’s resignation is effective only after acceptance by the Governor.

• A. i, ii, and iv
• B. i and iii
• C. ii and iii
• D. i and iv

Answer 1

Answer:

A. i, ii, and iv

State Finance Commission:

• Constitutional Basis: The State Finance Commission (SFC) is a constitutional body established under Article 243-I and 243-Y of the Constitution of India.

• Purpose: It reviews the financial position of Panchayats and Municipalities and recommends the distribution of taxes, duties, tolls, and fees between the State and local bodies, as well as grants-in-aid to them.

• Composition:

  • The composition of the SFC is determined by the State Legislature by law.

  • Typically, it consists of a Chairman and four other members.

  • The Governor appoints the members.

• Eligibility for Reappointment: The members of the State Finance Commission are eligible for reappointment, meaning they can serve for more than one term if re-nominated and re-appointed.

• Experience of Members: While not strictly mandated in the Constitution, it is a common practice and often stipulated by State laws that at least one member should possess experience in local administration or finance to ensure practical insights.

• Qualifications of Chairman: The Chairman of the State Finance Commission does not necessarily have to be a retired judge of the High Court. The qualifications and selection criteria for the Chairman are usually decided by the respective State Legislature.

• Resignation: A member's resignation from the State Finance Commission becomes effective only after the Governor accepts it. This ensures a formal process for vacating the position.

• Tenure: The tenure of the members of the SFC is determined by the Governor on the recommendation of the State Legislature, and they hold office during the pleasure of the Governor.