Which one of the following authorities makes a recommendation to the Governo of a State as to the principles for determining the taxes and duties which may be appropriated by the Panchayats in that particular state?

Which one of the following authorities makes a recommendation to the Governo of a State as to the principles for determining the taxes and duties which may be appropriated by the Panchayats in that particular state? Correct Answer State Finance Commission

The correct answer is ​State Finance Commission.

  • State Finance Commission is responsible for the distribution of funds between the State and the Panchayats of the net proceeds of the taxes, duties, tolls, and fees leviable by the State. 

Key Points

  • About Finance Commission
    • The Finance Commission is a constitutional body that is the axis of fiscal federalism, which is constituted under Article 280 of the Constitution.
    • Its main responsibility is to evaluate the financial conditions of the Union and the States, to recommend the sharing of taxes among them, and to determine the principles for the distribution of these taxes among the States.
    • District Planning Committees - a District Planning Committee is constituted to consolidate the plans prepared by the Panchayats and Municipalities in the district and prepare a development plan format for the entire district.
    • Finance Ministry of that State - The function of the minister for finance of state is to coordinate with the state and also ensure transparency in operation and provide support for the development of the economy.
    • Panchayati Raj Ministry of that State - The Panchayati Raj Institutions are the nodal point at the district level. The main role is to execute the plan, coordinate, monitor and wherever required regulate the implementation of various national programs.

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