Question

Which of the following does not form part of the recommendation of Finance Commission?

• A. Distribution of net proceeds of taxes between the union and the states.
• B. Principles governing grants-in-aid of the revenues of the states out of the Consolidated Fund of India.
• C. The amount of money to be allocated to the states from Public Account of India.
• D. Measures needed to augment the Consolidated Fund of a State.

Answer 1

The correct option is C The amount of money to be allocated to the states from Public Account of India.

The President shall at the expiration of every fifth year or at such earlier time as the President considers necessary, by order constitute a Finance Commission. Its duty is :

To make recommendations to the President as to –

• The distribution between the Union and the States of the net proceeds of taxes
  
• Principles governing the grants in-aid of the revenues of the States out of the Consolidated Fund of India
  
• Measures needed to augment the Consolidated Fund of a State to supplement the resources of the Panchayats and Municipalities in the State on the basis of the recommendations made by the State Finance Commission.
  
• Any other matter referred to the Commission by the President in the interests of sound finance.