Discuss the role of the Finance Commission in fiscal federalism in India.
The Finance Commission has no role in fiscal federalism
The Finance Commission plays a key role in recommending the distribution of financial resources between the central and state governments
The Finance Commission only focuses on central government finances
The Finance Commission leads to centralization of financial powers
Answer and Solution
Answer
B. The Finance Commission plays a key role in recommending the distribution of financial resources between the central and state governments
Solution:
The Finance Commission in India plays a crucial role in recommending the distribution of financial resources between the central and state governments to ensure fiscal federalism. It helps in maintaining a balance in resource allocation and promoting financial equity among different levels of government.
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