Question
Explain the origin, significance and composition of State Finance Commission.
Answer :
Word Count : 491
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The State Finance Commission (SFC) is a constitutional body established under Article 243-I of the Constitution of India. Its origin can be traced to the 73rd Amendment Act of 1992, which sought to strengthen local self-governance and ensure a more equitable distribution of financial resources between the state government and local bodies, such as Panchayati Raj institutions and municipalities. The need for the SFC arose from the recognition that decentralized governance requires adequate and predictable financial support to enable local bodies to perform their functions efficiently and to meet the growing demands of local development. By recommending devolution of funds, it helps in bridging the financial gap between state governments and local governance institutions, promoting fiscal federalism within
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