Constitution Section 243Y — Finance Commission

Part IXA — THE MUNICIPALITIES

Constitutional

Summary

The Finance Commission, which is already set up under another constitutional provision, must also examine the financial situation of Municipalities. It will suggest to the Governor how state tax money, fees, and tolls should be shared between the state and Municipalities, and how that share should be divided among different levels of Municipalities. The Commission will also recommend what taxes and fees Municipalities can collect, what grants they should receive from the state’s main fund, and any other steps needed to improve their finances. The Governor must present these recommendations to the state legislature, along with a note explaining what action has been taken on them.

Official Text

(1) The Finance Commission constituted under article 243I shall also review the financial position of the Municipalities and make recommendations to the Governor as to—

(a) the principles which should govern—

(i) the distribution between the State and the Municipalities of the net proceeds of the taxes, duties, tolls and fees leviable by the State, which may be divided between them under this Part and the allocation between the Municipalities at all levels of their respective shares of such proceeds;

(ii) the determination of the taxes, duties, tolls and fees which may be assigned to, or appropriated by, the Municipalities;

(iii) the grants-in-aid to the Municipalities from the Consolidated Fund of the State;

(b) the measures needed to improve the financial position of the Municipalities;

(c) any other matter referred to the Finance Commission by the Governor in the interests of sound finance of the Municipalities.

(2) The Governor shall cause every recommendation made by the Commission under this article together with an explanatory memorandum as to the action taken thereon to be laid before the Legislature of the State.