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UPSC Prelims 2002 Q80: Indian Polity – Public Finance & Finance Commission

UPSC Prelims 2002, General Studies Paper I · Indian Polity

Which one of the following authorities recommends the principles governing grants - in - aid of the revenues to the states out of the Consolidated Fund of India?
  1. (a) Finance Commission
  2. (b) Inter - State Council
  3. (c) Union Ministry of Finance
  4. (d) Public Accounts Committee

Answer: (a) Finance Commission

Explanation

Authority recommending principles for grants-in-aid to States

BodyRole
Finance CommissionRecommends the principles governing grants-in-aid from the Consolidated Fund of India (Article 275)
Inter-State CouncilForum on Centre-State issues (Article 263)
Union Ministry of FinanceAdministers finances, does not set the principles
Public Accounts CommitteeExamines audit reports of the CAG

Under Article 280 the Finance Commission recommends the distribution of taxes and the principles governing grants-in-aid of the revenues of the States out of the Consolidated Fund of India under Article 275.

Answer: (a) Finance Commission.

Why each option is right or wrong

Key point

Article 280: Finance Commission every five years; Article 275: statutory grants-in-aid; Article 282: discretionary grants.

Remember

Finance Commission recommends the principles of grants-in-aid to States.

Common mistakes

Exam tip

Grants-in-aid principles are a Finance Commission task by Article 280.

Sources

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