State Finance Commission (SFC)
News –
- The State Finance Commission (SFC) in Karnataka has recommended a high-level inquiry into electricity billing and payments for gram panchayat installation
The State Finance Commission (SFC)
- It is a constitutional body created under the 73rd and 74th Amendments to ensure the financial health of local governments.
Constitutional Basis
- Article 243-I: Governor appoints an SFC every 5 years for Panchayats.
- Article 243-Y: Applies the same rule to Municipalities.
Core Functions (Recommendations to Governor)
- Tax Sharing: Dividing state tax revenues between the state and local bodies.
- Tax Allocation: Deciding which taxes, tolls, and fees local bodies can collect.
- Grants-in-Aid: Allocating funds to local bodies from the Consolidated Fund of the State.
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