(1)The Governor shall, as soon as may be, after the commencement of this Act, but not later than 24th April 1994 and thereafter at the expiration of every fifth year, constitute a Finance Commission referred to in Article 243-I of the Constitution to review the financial position of the Panchayats and to make recommendations to the Governor as to -(a)the principles which should govern, -(i)the distribution between the State and Panchayats of the net proceeds of the taxes, duties, tolls and fees leviable by the Government which may be divided between them and allocation between the District Panchayats, Panchayat Union Councils and Village Panchayats 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 Panchayats;(iii)the grants-in-aid to the Panchayats, from the Consolidated Fund of the State;(b)the measures needed to improve the financial position of the Panchayats;(c)any other matter referred to the Finance Commission by the Governor in the interest of sound finance of the Panchayats.
