Karnataka 4th Finance Commission: NammaKPSC classroom session for KAS-2016 Challengers

4th State Finance Commission’s tour of State

Why in News: The three-member Fourth State Finance Commission (SFC), headed by C.G. Chinnaswamy, has begun consulting with experts and urban and rural local bodies on the distribution of net proceeds of taxes, duties, tolls and fees collected by the State government between the State and local bodies.

karnataka finance commission

  • The commission, which has been mandated to review the financial position of urban and rural local bodies, has started a tour of districts to hold consultations with elected representatives and officials of the zilla, taluk and gram panchayats, municipal corporations, city municipal councils, town municipal councils and town panchayats.
  • It will then recommend to Governor Vajubhai Vala measures to strengthen their financial position.
  • The commission, with H.D. Amaranathan and H. Shashidhar as members and S.R. Umashankar as member-secretary, began its tour on July 27 by visiting Kolar and holding discussions with elected representatives and officials of the local bodies.
  • It will visit Kalaburagi and Yadgir districts on August 30 and 31, respectively. Its tour will be completed only in December, after which report compilation will begin.
  • Prior to the finalisation of the recommendations, the commission will interact with its counterparts in Kerala, Tamil Nadu, Andhra Pradesh, Maharashtra, West Bengal and other States.
  • The Finance Department had made a presentation to the commission in February this year about the resources of the State government and demands thereon on account of expenditure of civil administration, debt servicing, development and other committed expenditure.
  • The details of the resources transferred to the local bodies based on the recommendations of the previous SFCs were also provided.
  • The 4th SFC would also hold discussions with the chairpersons and members of previous SFCs and would consider sponsoring studies on selected issues. The commission will also examine the suitability of using some form of index/indices as the basis for recommendations on tax devolution and grants in aid.
  • The SFC will make specific recommendation on the award of grants in aid to local bodies from the consolidated fund of the State and suggest measures to improve the financial position of the local bodies.

About Karnataka Finance Commission:

  • The 4th State Finance Commission: C G Chinnaswamy as the Chairman and H D Amaranathan and Dr H Shashidhar as its full time
  • Karnataka Finance Commission has been established in the state so that it can help in improving the economic condition of the various Panchayats in the state.
  • Karnataka Finance Commission has been established in the state according to the rules that have been laid down in the Constitution of India, Article 243 (I
  • The state government sets up the Finance Commission in Karnataka once after every five years. –

Karnataka Finance Commission functions are:

  1. To look over the financial situation of the various Panchayats that are there in the state
  2. To take such measures that help in improving the economic situation of the various Panchayats that are there in the state
  3. To grant funds to the various Panchayats that are there in the state from the Consolidated Fund of the State
  4. To distribute the total amount of taxes, tolls, duties, and fees that are charged by the state government among the various Panchayats in the state and the state government
  5. To function as an arbiter with regard to financial matters between the state and the central government
  6. To transfer the funds that are alloted by the central government to the state government
  7. To decide the amount of taxes, duties, tolls, and fees that may be levied by the various Panchayats that are there in the state
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