Who is empowered to review financial position of the Panchayats?

Question

Who is empowered to review financial position of the Panchayats?

1. A. Chief Minister
2. B. Chairman of Block Committee
3. C. Chairman of District Council
4. D. Finance Commission constituted by the Governor (Correct answer)

Correct Answer

Option D — Finance Commission constituted by the Governor

Detailed Solution & Explanation

The correct answer is Finance Commission constituted by the Governor.

Key Points

• Under Article 243-I, the Governor of a State must constitute a State Finance Commission (SFC) every five years to review the financial position of the Panchayats and make recommendations on the distribution of taxes, duties, tolls and fees between the State and the Panchayats, and on grants-in-aid.
• This provision was introduced by the 73rd Constitutional Amendment Act, 1992, which gave constitutional status to Panchayati Raj Institutions through Part IX and the Eleventh Schedule.
• A parallel provision, Article 243-Y, applies the same State Finance Commission mechanism to Municipalities under Part IX-A, added by the 74th Amendment.
• The Governor must place the SFC's recommendations, along with an action taken report, before the State Legislature.

Exam Tip

• distinguish the Union Finance Commission (Article 280, constituted by the President) from the State Finance Commission (Article 243-I, constituted by the Governor).

प्रश्न (हिन्दी में)

पंचायतों की वित्तीय स्थिति की समीक्षा के लिए कौन अधिकृत है?

1. A. मुख्यमंत्री
2. B. ब्लॉक समिति का अध्यक्ष
3. C. जिला परिषद का अध्यक्ष
4. D. राज्यपाल द्वारा गठित वित्त आयोग