Part IXA: The Municipalities
Article 243Y: Finance Commission
Original Article:
The Finance Commission constituted under article 243-I shall also review the financial position of the Municipalities and make recommendations to the Governor.
Amendments:
Introduced by the 74th Amendment Act, 1992, Article 243Y outlines the role of the Finance Commission in improving municipal finances.
Explanation:
Article 243Y ensures financial support and sustainability for Municipalities through principles for revenue-sharing, assignment of taxes, and grants-in-aid.
Clause-by-Clause Explanation:
- Revenue Distribution: Recommends principles for sharing taxes between the State and Municipalities.
- Assignment of Taxes: Suggests specific taxes that can be collected by Municipalities.
- Grants-in-Aid: Provides additional financial support from the State Consolidated Fund.
- Improvement Measures: Recommends ways to enhance Municipal finances.
Real-Life Examples:
- In Maharashtra, specific taxes were allocated to Municipalities following Finance Commission recommendations.
- The Pune Municipal Corporation utilized grants to finance public health projects and infrastructure.
Frequently Asked Questions (FAQs):
The Finance Commission recommends revenue-sharing principles, assigns taxes, and suggests grants to Municipalities.
Taxes are assigned by the Finance Commission based on State laws and financial requirements.
The Governor presents the recommendations to the State Legislature with an explanatory memorandum on actions taken.
Debates and Deliberations:
During the discussions on Article 243Y, prominent members emphasized the need for financial autonomy and accountability for Municipalities.