Which one of the following authorities makes recommendation to the Governor 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: b) State Finance Commission
ExplanationThe State Finance Commission (SFC) is the authority responsible for making recommendations to the Governor of a State regarding the principles for determining the taxes, duties, tolls, and fees that may be assigned to or appropriat- ed by the Panchayats (local self-governments) in that State.It is constituted under Article 243-I of the Indian Constitution by the Governor of each state.It makes recommendations re- garding the distribution of financial resources between the State Government and the Panchayati Raj Institutions (PRIs), including the principles for:1. Determining taxes, duties, tolls, and fees to be assigned or appropriated by Panchayats.2. Grants-in-aid to the Panchayats from the state’s consolidated fund.3. Measures to improve the financial position of Panchayats.240
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