Multiple choice

Which of the following is not the function of the Finance Commission?

  1. The distribution of net proceeds of taxes to be shared between the Centre and the States, and the allocation of the respective share of such proceeds between the States

  2. The principles which should govern the grants-in-aid by the Centre to States out of the Consolidated Fund of India

  3. The measures needed to augment the Consolidated Fund of India to supplement the resources of the Panchayats and the Municipalities in the State on the basis of the recommendations made by the State Finance Commission

  4. Any other matter referred to it by the President in the interest of sound finance
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Option C refers to State Finance Commissions which deal with Panchayats and Municipalities. The Central Finance Commission deals with Centre-State tax distribution, grants-in-aid principles, and presidential referrals - not state-local bodies.

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