The Kerala Cabinet recently approved the formation of the Seventh State Finance Commission, to enhance the fiscal health of local bodies and improve their financial management capabilities.
Objectives of the Commission:
- Fiscal Review: Assess the financial status of local bodies, including panchayats and municipalities.
- Recommendations: Provide suggestions on policies and measures to strengthen local finances.
- Taxation: Review and recommend the distribution of taxes, duties, tolls, and fees that can be assigned to or appropriated by local bodies.
- Disaster Management: Equip local bodies to handle disaster management more effectively.
Constitutional and Legislative Framework:
- Constitutional Basis: Established under Article 243(I) and Article 243(Y) of the Constitution.
- Financial Review: Assesses the financial position of panchayats and makes recommendations for improvement.
- Article 243(I): Introduced by the 73rd Constitutional Amendment Act, 1992, it mandates the constitution of a Finance Commission every 5 years.
- Duties: Review financial positions and recommend principles for:
- Distribution of state tax proceeds between the state and panchayats.
- Taxes, duties, tolls, and fees assigned to panchayats.
- Grants-in-aid from the State Consolidated Fund to panchayats.
- Article 243(Y): Extends similar recommendations to municipalities.
- Structure of the Seventh Commission:
- Posts Assigned: Includes positions for Additional Secretary (Commission Secretary), Joint Secretary, Under Secretary, Accounts/Section Officer, and six supporting staff.
Ref: Source
| UPSC IAS Preparation Resources | |
| Current Affairs Analysis | Topperspedia |
| GS Shots | Simply Explained |
| Daily Flash Cards | Daily Quiz |
Frequently Asked Question:
What is the purpose of the State Finance Commission in Kerala?
Its purpose is to enhance the fiscal health and financial management capabilities of local bodies.
What constitutional provisions guide the State Finance Commission?
It is established under Article 243(I) and Article 243(Y) of the Constitution, introduced by the 73rd Constitutional Amendment Act, 1992.
What are the primary duties of the State Finance Commission?
It reviews the financial positions of local bodies and recommends principles for the distribution of taxes and grants-in-aid.
How often must a State Finance Commission be constituted?
A State Finance Commission must be constituted every five years as per Article 243(I).
What areas does the Seventh State Finance Commission aim to improve?
It focuses on fiscal health, taxation, financial management, and disaster preparedness for local bodies.