Multiple choice

Which of the following statements is/are correct?

  1. Finance Commission augments consolidated fund of a state for its Panchayats and Municipalities.
  2. Recommendations of the Finance Commission are not binding on the government.
  3. Grant-in-aid may include capital grants also.

  1. 1 and 2

  2. 2 and 3

  3. Only 3

  4. 1, 2 and 3
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Statement 1 is correct. It recommends the President about the measures needed to increase the consolidated fund of a state to aid both panchayats and municipalities.

Statement 2 is correct. These are only advisory in nature and not binding on the government. Statement 3 is correct. Grants-in-aid can also include capital grants apart from revenue grants.

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