Which authority recommends the principles governing the grants-in-aid of the revenues of the states out of the Consolidated Fund of India?
(A) Public Accounts Committee
(B) Union Ministry of Finance
(C) Finance Commission
(D) Inter-State Council
Correct Answer : Finance Commission
Question Asked : SSC Section Officer (Audit) Exam 2001
Explanation : Finance Commission of India is established under Article 280 of the Indian Constitution by the President of India to define the financial relations between the centre and the state. It is entrusted with the task of distribution of net proceeds of taxes between Centre and the States, to be divided as per their respective contributions to the taxes; determine factors governing Grants-In Aid to the states and the magnitude of the same; and work with the State Finance Commissions and suggest measures to augment the Consolidated Fund of the States so as to provide additional resources to Panchayats and Municipalities in the state.
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