The State Finance Commission makes recommendations on:
- Principles governing distribution of net proceeds of taxes between the state and panchayats, and allocation among panchayats.
- Determination of taxes, duties, tolls, and fees assignable to panchayats.
- Grants-in-aid to panchayats from the consolidated fund of the state.
- Measures needed to improve the financial position of the panchayats.
- Any other matter referred by the governor in the interests of sound finance.