Official Answer Key & Detailed Solution
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Correct Answer: Option (B) — 2 and 3
Concept & Option Breakdown
Standard Reference VerifiedStatement 1 is incorrect: Withdrawal of money from the Consolidated Fund of India requires parliamentary authorization via Appropriation Acts, audited by the CAG. Statement 2 is correct: The Commission determines the distribution of the net proceeds of taxes between the Centre and the States. Statement 3 is correct: The Commission evaluates and recommends grants-in-aid to the States from the Consolidated Fund of India under Article 275. Statement 4 is incorrect: The Finance Commission is an advisory body on revenue devolution and does not supervise executive tax collection or budgetary compliance.
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