Question

The qualifications for the members of the State Finance Commission emphasize expertise in:

1. Economics and Financial Matters.

2. Public and Local Administration.

3. Judicial and Legal Procedures.

4. Government and Local Body Accounts.

Select the correct answer using the code given below:

• A. 1 and 3 only
• B. 2 and 4 only
• C. 1, 2 and 4 only
• D. 1, 2, 3 and 4

Answer 1

Answer:

C. 1, 2 and 4 only

State Finance Commission

• Constitutional Basis: The establishment of State Finance Commissions is mandated by Article 243-I and 243-Y of the Constitution of India. These articles empower the Governor to constitute a Finance Commission for each state.

• Primary Role: The SFC is tasked with reviewing the financial position of Panchayats and Municipalities and making recommendations to the Governor on the distribution of taxes, duties, tolls, and fees between the state and its local bodies.

• Key Expertise Areas for Members:

  • Economics and Financial Matters: A strong understanding of economics, public finance, and financial management is crucial for assessing the fiscal health of the state and its local bodies. This includes knowledge of revenue generation, expenditure management, and fiscal policy.

  • Public and Local Administration: Familiarity with the functioning of government, particularly at the state and local levels, is essential. This helps in understanding the administrative and operational aspects of local self-governance and their financial needs.

  • Government and Local Body Accounts: Expertise in accounting principles and practices, specifically as they apply to government and local bodies, is vital for reviewing financial statements and ensuring accountability.

• Exclusion of Judicial/Legal Procedures: While legal frameworks are important, specific expertise in judicial and legal procedures is generally not a primary qualification for SFC members, as the commission's focus is primarily financial and administrative.

• Appointment and Tenure: Members are appointed by the Governor, and their term is determined by the Governor.

• Significance in Federal Structure: SFCs play a critical role in strengthening fiscal federalism by ensuring a fairer distribution of financial resources to the grassroots level of governance.