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State Finance Commission

31-JUL-2015 10:32

    Similar to the Finance Commission under article 280, for the centre, since 1993, we also have State Finance Commission in all the states of India to review the financial position of the Panchayats and to make recommendations as to –

    • The distribution between the State and the Panchayats of the net proceeds of taxes, duties, tolls and fees leviable by the State which may be divided between them and how allocation would be made among various levels of Panchayats
    • What taxes, duties, tolls and fees may be assigned to the Panchayats;
    • Grant-in-aid to the Panchayats         

    The Functions of the State Public Commission are as Follows:

    • Reviewing the economic condition of the various Panchayati raj institutions and municipal bodies that are there in the state

    • Taking such steps that help in boosting the financial condition of the various municipal bodies and Panchayati raj institutions in the state

    • Allotting the funds to the various Panchayati raj institutions and municipal bodies in the state from the Consolidated Fund of the State

    • Acting as an arbiter between the central and the state governments with regard to issues that are of financial nature

    • Transferring funds that are granted by the central government to the state government

    • Distributing between the various municipal bodies and Panchayati raj institutions that are there within the state and the state government the total proceeds of taxes, fees, tolls, and duties that are charged by the state government

    • Determining the taxes, tolls, duties, and fees that may be levied by the various Panchayati raj institutions and municipal bodies that are there within the state           

    Critical Appraisal

    To harness the concept and aspiration of Panchayati Raj Institution in India, the role of State Finance Commission has to be very critical. The devolution of power can be realised if the finances are prudently available till the last rank officials with ample autonomy and authority. It is in these aspects, that the role of State Finance Commission can be looked into.                                                    

    Positives facts about States Finance Commission:

    • Enhanced the idea of democracy

    • Greater devolutionary aspects of the government and governance.

    • Empowerment of local people and local leaders.

    • Efficient and timely accessibility of funds to remote corners

    Negatives Facts about States Finance Commission:

    • States are too reluctant to let loose their financial authority

    • Too much of interference and encroachment in the autonomy and working of State Finance Commission

    • States themselves do not have ample funds at their disposal; hence even sharing that meagre amount is always resisted by the state government.

    • The idea of State Finance Commission has not has not been implemented in true spirit

    DISCLAIMER: JPL and its affiliates shall have no liability for any views, thoughts and comments expressed on this article.

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