2023 · Q55
Which of the following statements about the functions of the State Finance Commission is/are correct?
- 1It reviews the financial position of the local governments in the State.
- 2It reviews the distribution of revenue between rural and urban local governments.
Select the correct answer using the code given below.
Indian Polity, Governance and ConstitutionFederalism and local governance
- A1 only
- B2 only
- CBoth 1 and 2
- DNeither 1 nor 2
Explanation
Under Articles 243-I and 243-Y, the State Finance Commission reviews the financial position of local governments, both rural panchayats and urban municipalities, and recommends principles for distributing revenues, including as between rural and urban local bodies. Hence both statements are correct, option C.