97. Finance Commission for Panchayats.
(1) The Governor shall constitute every five years a Finance Commission to review the financial position of the Zilla Parishads and Gram Panchayats and to make recommendations to the Government as to
(a) the principles which should govern
(i) the distribution between the State and the Zilla Parishads and the Gram Panchayats and the net proceeds of the taxes, duties, tolls and fees leviable by the Government which may be divided between them and allocation between the Zilla Parishad and Gram Panchayat 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 Zilla Parishad and Gram Panchayat;
(iii) the grants-in-aid to the Zilla Parishads and Gram Panchayats from the Consolidated Fund of the State;
(b) the measures needed to improve the financial position of the Zilla Parishads and Gram Panchayats; and
(c) any other matter referred to the Finance Commission by the Governor in the interest of sound finance of the Zilla Parishads and Gram Panchayats.
(2) The Finance Commission shall consist of a member.
(3) The member of Finance Commission shall be appointed in such manner as may be prescribed from among persons who
(a) have experience in public affairs; or
(b) are or have been, or are qualified to be appointed as a Judge of a High Court; or (c) have special knowledge of the finances and accounts of Governments; or
(d) have had wide experience in financial matters and in administration; or (e) have special knowledge of economics.
(4) The Finance Commission shall determine its procedure.
(5) The member of the Finance Commission may resign his office by writing under his hand and addressed to the Governor but he shall continue in office until his resignation is accepted by the Governor.
(6) The casual vacancy occurring due to the resignation of the member under sub-section (5) or for any other reason may be filled by fresh appointment and a member so appointed shall hold office for the remaining period for which the member in whose place as he was appointed would have held office.
(7) In the performance of its functions, the Commission shall have the following powers, namely:
(a) to call for any record from any officer or authority;
(b) to summon any person to give evidence or produce records; and
(c) such other powers as may be prescribed.
(8) The Governor shall cause every recommendation made by the Finance Commission under this section together with an explanatory memorandum as to the action taken thereon to be laid before the State Legislature.