Consider the following statements: The function (S) of the Finance Commission is/are 1. to allow the withdrawal of money out of the Consolidated Fund of India. 2. to allocate between the States the shares of proceeds of taxes. 3. to consider applications

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Q: 73 (IAS/2003)
Consider the following statements: The function (S) of the Finance Commission is/are
1. to allow the withdrawal of money out of the Consolidated Fund of India.
2. to allocate between the States the shares of proceeds of taxes.
3. to consider applications for grants-in-aid from States.
4. to supervise and report on whether the Union and State governments are levying taxes in accordance with the budgetary provisions.
Which of these statements is/are correct?

question_subject: 

Polity

question_exam: 

IAS

stats: 

0,174,48,11,174,13,24

keywords: 

{'budgetary provisions': [0, 0, 1, 0], 'finance commission': [8, 1, 3, 1], 'taxes': [2, 1, 1, 0], 'consolidated fund': [1, 0, 0, 3], 'grants': [2, 0, 1, 0], 'state governments': [3, 4, 3, 22], 'union': [17, 3, 24, 36], 'states': [1, 0, 0, 1]}

The function of the Finance Commission of India is to distribute revenues between the Union and the States. This is covered in statement 2, which states the commission`s role to allocate between the States the shares of proceeds of taxes.

Furthermore, the Finance Commission also looks at applications for grants-in-aid from States, as per statement 3. Grants-in-aid are a form of financial assistance provided by the Centre to the States to supplement their resources.

Statement 1, which mentions the withdrawal of money from the Consolidated Fund of India, isn`t accurate as the Finance Commission does not have this power.

Statement 4, which suggests supervision and reporting on the Union and State governments` tax activities, isn`t exactly correct either. While the Finance Commission does review the country`s financial position, it is not tasked with budgetary or tax compliance supervision.

Therefore, only statements 2 and 3 are correct, making option 2 the correct answer.

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