The State Finance Commission

he finance department of the Indian government deals with all the economic and financial issues that influence all the states, such as resource mobilisation and allocation for infrastructure development, social welfare, human development, and administrative objectives. Budgeting and preparation of the Annual Financial Statement are the main tasks and activities of the State Finance Commission in Bihar, as are expenditure monitoring, Treasury administration, and Internal Audit of Government Departments. The article also discusses the State Finance Commission, the State Finance Minister, and the State Finance Minister’s duties.

A brief guide on the State Finance Commission

Article 243 gave the State Finance Commission authority over city councils or municipalities. A State Finance Commission performs all the tasks as the central finance commission. It disburses state funds to the Panchayati Raj institutions. Taxes, fees, and fines are collected at all three levels by state and municipal governments.

Article 280 of the Indian Constitution allocates government funds between the central government and states. In addition, a State Finance Commission reviews the financial position of a state’s panchayats and makes recommendations to the governor whether Bihar is a self-government based state or has the envision of panchayat sarkars. 

Establishing A State Finance Commission 

States are not allowed to form State Finance Commissions every five years, as required by the 73rd Constitutional Amendment Act. As a result, suggestions for the formation of SFCs in the Indian states were made. The sole purposes of the SFCs would be rationalising and systematising the state-sub-state fiscal relations.

State Finance Commissions (SFCs) of Bihar

The State Finance Commission (SFC) was established by the 73rd and 74th Constitutional Amendments (CAs) to simplify and standardise fiscal interactions between Indian states and sub-states. Thus, to keep up with the act, with the fifth state commission act of Bihar in January 2016, the decision was taken up to make the Panchayat sarkars even better with the upcoming developments. The State Finance Commission took the initiative of improving the local body window within the budget of the state. This would further empower the directorate of local fund audit, which would, in turn, secure the future of the State Finance Commission of Bihar. 

Concerns related to State Finance Commissions (SFCs) of Bihar:

• The question of committed liability towards the state finance commission of Bihar
• The Bihar finance reports cannot produce reports on time due to a lack of expertise
• The state has significant work ahead of them, as it must examine many local administrations
• They are confronted with a critical issue of data reliability
• Local governments and SFCs are viewed as having a lower constitutional position than the Union FC

Overview of the Ministry of Finance and State Finance Minister of Bihar

The Ministry of Finance is responsible for the financial institutions, taxation, financial legislation, federal and state budgets, capital markets, and the Union Budget of Bihar. The Bihar Revenue Service, the Audit and Accounts Service are all under the administration of the Ministry of Finance. It is also the ultimate controlling authority of the Bihar economy and Management Accounts Service, which is one of the central functioning services. Tarkishore Prasad, the current state finance minister, is known to be handling the finances of the state with much care so as to improve the condition of the state in a promising manner. 

Role of the State Finance Minister

The role of the State Finance Minister includes preparing and presenting the budgets for state governments to the parliament under President’s Rule and union territory administrations. According to the fifth state commission of Bihar, the state finance minister took the initiative to discuss the agendas that need reformation with the PRD and UDD. The SFC cell of the Finance Department was given the recommendations for the database, built up according to the PRIs and the ULBs for the benefit of the Panchayati Raj, the SFCs and UFCs by the finance minister. 

Conclusion

The governor of a state is responsible for ensuring that the recommendations of a State Finance Commission are laid before the state assembly under Article 243-I of the Indian Constitution. A memorandum outlining the action taken by the government in response to the commission’s report is also included. The function of the State Finance Commission in Bihar is to harness the concept and aim of the Panchayati Raj Institution for the improvement of the state. The State Finance Commission promotes democracy and empowers residents and leaders. The Finance Commission is a one-of-a-kind constitutional authority in the state that recommends how tax money should be shared between the federation and the state itself.