Section 32-A: Finance Commission

¹[(1) The Governor shall, as soon as may be within one year from the commencement of the Constitution (Seventy-third Amendment) Act, 1992 and there after at the expiration of every fifth year, constitute a Finance commission to review the financial position of the Gram Panchayat, Kshettra Panchayat and Zila Panchayat and to make recommendations to the Governor as to—

(a) the principles which should govern—

(i) the distribution between the State and the Gram Panchayats, Kshetra Panchayats and Zila Panchayat of the net proceeds of the taxes, duties, tolls and fees levialble by the State, which may be divided between them and the allocation between the Gram Panchayats, Kshettra Panchayats and Zila Panchayats of their respective shares of such proceeds :

(ii) the determination of the taxes, duties, toils and fees which may be assigned to, or appropriated by the Gram Panchayats, Kshettra Panchayats and Zila Panchayats :

(iii) the grants in-aid to the Gram Panchayat Kshettra Panchayats and Zila Panchayats ;

(b) the measures needed to improve the financial position of the Gram Panchayats, Kshettra Panchayats and Zila Panchayats ;

(c) any other matter referred to the Finance Commission by the Governor in the interest of sound finance of the Gram Panchayats, Kshettra Panchayats and Zila Panchayats.

(2) The Finance Commission shall consist of a Chairman and two other members who shall possess such qualifications and shall be selected in such manner as may be prescribed.

(3) The Finance commission shall determine their procedure.

(4) The Chairman or a member of the Finance Commission may resign his office by writing under his hand addressed to the Governor but shall continue in his office till the resignation is accepted.

(5) A casual vacancy in the office of the Chairman or a member of the Finance Commission may be filled for the remainder of the period of his predecessor.

(6) The Finance Commission shall have the following powers for the performance of its functions, namely,—

(a) call for any record from any officer or authority;

(b) summon any person to give evidence or produce a record; and

(c) such other powers as may be prescribed.

(7) The Governor shall cause every recommendation made by the Finance Commission under this section together with an explanatory memorandum as to the action taken thereon to be laid before both the Houses of the State Legislature.]