Which of the following Constitutional Amendment Acts constituted the State Finance Commission?
Show answer & explanation
Correct answer: A
Explanation
The correct answer is Option 1 i.e. 73rd Amendment Act.
The 73rd Constitutional Amendment Act of 1992 constituted the State Finance Commission. This amendment aimed to strengthen the system of Panchayati Raj and ensure financial autonomy for rural local bodies. Under this provision, every state is required to establish a State Finance Commission every five years to review the financial position of Panchayats and recommend the distribution of revenues between the state and local bodies. The commission also suggests measures to improve the financial health of Panchayats. Thus, the 73rd Amendment played a crucial role in deepening grassroots democracy and empowering local self-governments with greater fiscal responsibility.