Functions of the Finance Commission.

(1) The Finance Commission shall review the financial position of the Gram Panchayats, Mandal Praja Parishads and Zilla Praja Parishads and make recommendations to the Government as to,- (a) the principles which should govern,- (i) the distribution between the State and the said Gram Panchayats, Mandal Praja Parishads and Zilla Praja Parishads of the net proceeds of the taxes, duties, tolls and fees leviable by the State, which may be divided between them and the allocation between the said Gram Panchayats, Mandal Praja Parishads and Zilla Praja Parishads 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 apportioned by, the said Gram Panchayats, Mandal Praja Parishads and Zilla Praja Parishads; (iii) the Grant-in-aid to the said Gram Panchayats, Mandal Praja Parishads and Zilla Praja Parishads from the Consolidated Fund of the State; (b) the measures needed to improve the financial position of the said Gram Panchayats, Mandal Praja Parishads and Zilla Praja Parishads. (2) The Government shall cause every recommendation made by the Commission under this section together with an explanatory memorandum as to the action taken thereon to be laid before the Legislature of the State.