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Choose the correct statement(s) regarding the constitutional basis and scope of the State Finance Commission (SFC).

  1. The SFC is a constitutional body established under Article 243-I to review the financial position of Panchayats and under Article 243-Y for Municipalities.

  2. The SFC's recommendations are exclusively focused on the distribution of taxes and do not cover grants-in-aid from the state.

A1 only

B2 only

CBoth 1 and 2

DNeither 1 nor 2

Answer:

A. 1 only

Read Explanation:

Constitutional Basis and Scope of the State Finance Commission (SFC)

  • Article 243-I of the Indian Constitution mandates the establishment of a State Finance Commission every five years. This commission is specifically tasked with reviewing the financial position of the Panchayats.
  • Article 243-Y, enacted through the 73rd and 74th Constitutional Amendments, extends similar review functions to the Municipalities.
  • The SFC's scope is comprehensive, encompassing the distribution of net proceeds of taxes, duties, tolls, and fees leviable by the State, which are to be assigned to or distributed among Panchayats and Municipalities.
  • Beyond tax distribution, the SFC also recommends measures to augment the Consolidated Fund of a State to supplement the resources of Panchayats and Municipalities.
  • Furthermore, it advises on matters relating to the devolution of financial resources, grants-in-aid from the State Consolidated Fund to Panchayats and Municipalities, and the measures needed to improve their financial position.
  • Therefore, the recommendations of the SFC are not exclusively about tax distribution but also include grants-in-aid and other financial augmentation measures.
  • The recommendations of the SFC are advisory in nature and are laid before the State Legislature. The State Government decides on the extent to which these recommendations are to be implemented.

Related Questions:

Which of the following statements are not associated with the Advocate General’s qualifications?

i. The Advocate General must be a citizen of India.

ii. The Advocate General must have been an advocate for 15 years in a High Court.

iii. The Advocate General must be a resident of the state they serve.

iv. The Advocate General must have held a judicial office for 10 years as an alternative qualification.

The recommendations submitted by the State Finance Commission to the Governor include principles governing:

  1. The sharing of net income of state-levied taxes between the Government and Panchayats.

  2. The appointment of executive officers for the Panchayats.

  3. The taxes, duties, cesses, and fees which may be marked for and expended by the Panchayats.

Which of the statements given above is/are correct?

With respect to the Western Zonal Council, consider the following statements:

  1. It includes Gujarat, Maharashtra, and Goa.

  2. Its headquarters is in Mumbai.

  3. The council is chaired by the Chief Minister of Maharashtra.

Which of the above statements is/are correct?

Which committee relates to study poverty line?

With reference to the role and independence of the CAG, consider the following statements:

i. The CAG is described as the guardian of the public purse and controls the entire financial system of the country at both the Centre and State levels.
ii. The CAG can be removed by the President only on the grounds of proved misbehaviour or incapacity, following a resolution by both Houses of Parliament with a special majority.
iii. The CAG is eligible for further office under the Government of India or any State after ceasing to hold office.
iv. The administrative expenses of the CAG’s office are charged upon the Consolidated Fund of India and are not subject to the vote of Parliament.

Which of the statements given above are correct?