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?
- ADistrict Planning Committees
- BState Finance CommissionCorrect
- CFinance Ministry of that State
- DPanchayati Raj Ministry of that State
Explanation
The correct answer is B, the State Finance Commission.
According to Article 243-I of the Constitution of India, the Governor of a State shall constitute a Finance Commission every five years. The primary duty of this commission is to review the financial position of the Panchayats and make recommendations to the Governor regarding the principles that should govern the distribution of net proceeds of taxes between the State and the Panchayats.
It also recommends the principles for determining which taxes, duties, tolls, and fees may be assigned to or appropriated by the Panchayats to ensure their financial autonomy and effective functioning. While District Planning Committees focus on consolidating development plans and the State Ministries handle administration and budgeting, only the State Finance Commission is constitutionally mandated to recommend the fiscal devolution principles for local bodies.
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