Question

Consider the following statements about fiscal decentralization:

1. It allows local governments to control their budgets to reflect local priorities.
2. Fiscal decentralization only applies to Panchayati Raj Institutions, not Urban Local Bodies

• A. None of these
• B. 1 only
• C. 1, 2
• D. 2 only

Answer 1

Answer:

B. 1 only

Fiscal decentralization is the process of transferring financial powers and responsibilities from central to local governments, enabling local bodies to raise, allocate, and manage funds for local needs and services.