Multiple choice

Consider the following statements about Municipalities:

  1. State Finance Commission provides constitution of funds for crediting all money of municipalities.
  2. State Finance Commission assigns municipality with taxes, duties, toll and fees to be collected by the state government. Which of the above is/are correct?

  1. Only 1

  2. Only 2

  3. Both 1 and 2

  4. Neither 1 nor 2
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Both statements are incorrect. The State Finance Commission (not State) recommends principles for distribution of funds between state and municipalities, and it does not assign municipalities with taxes to be collected by state government. Article 243-I and 243-Y of the Constitution deal with State Finance Commission, which recommends financial principles but does not directly constitute funds or assign taxes.

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