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Article 243-Y, inserted by the 74th Amendment, mandates State Finance Commission to be constituted every ______ years to review financial position of Municipalities and recommend principles for grants-in-aid and revenue sharing.
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Answer: 5
State Finance Commission for Municipalities: (a) Article 243-Y (74th Amendment): Mandates State Finance Commission (SFC) to be constituted every 5 years by Governor to review financial position of Municipalities, (b) Functions: (i) Review financial position: Assess Municipality revenues, expenditures, fiscal capacity, (ii) Recommend principles: For distribution of net proceeds of taxes, duties, tolls, fees between State and Municipalities, (iii) Grants-in-aid: Recommend grants to Municipalities from State Consolidated Fund based on needs, performance, (iv) Measures to improve: Suggest steps to improve Municipality financial management, revenue collection, (c) Applications: (i) Devolution: SFC recommendations guide State in devolving functions, funds, functionaries to Municipalities, (ii) Resource allocation: Ensures Municipalities receive adequate resources for constitutional functions (urban planning, service delivery), (iii) Accountability: SFC reports submitted to Governor, laid before State Legislature; PAC examines implementation, (d) Challenges: (i) Timely constitution: Many States delay constituting SFCs, affecting Municipality planning, budgeting, (ii) Implementation: State governments may not fully implement SFC recommendations, limiting Municipality fiscal autonomy, (iii) Capacity: SFCs need expertise in public finance, urban governance to make informed recommendations, (e) Illustrates fiscal federalism: SFC institutionalizes regular review of Municipality finances; independent Commission ensures objective, needs-based resource allocation for urban governance.