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CS Professional · CSR and Social Governance · Local Self Governance

The Governor of a State is deciding the matters to refer to the State Finance Commission for Panchayats. Which of the following is within the Commission's constitutional mandate to recommend?

Recommending grants-in-aid to Panchayats from the State's Consolidated Fund falls within the State Finance Commission's mandate, along with tax sharing and assignment of taxes. Union income tax allocation, Union audit and approval of Panchayat budgets lie outside its scope.

  1. AGrants-in-aid to Panchayats from the Consolidated Fund of the StateCorrect
  2. BAppointment of the Auditor of the Union accounts
  3. CAllocation of the Union share of income tax among States
  4. DApproval of the budget of each Gram Panchayat

Explanation

The Commission recommends the distribution of net State tax proceeds between the State and Panchayats, assignment of taxes and fees to Panchayats, and grants-in-aid from the State's Consolidated Fund. Union income tax sharing is for the Union Finance Commission, the Union auditor is the CAG, and Panchayat budgets are for the Panchayats themselves.

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