The State Finance Commission is a

The correct answer is C) Constitutional body. The State Finance Commission is mandated by Article 243-I for Panchayats and Article 243-Y for Municipalities, both inserted by the 73rd and 74th Constitutional Amendments (1992). The Governor constitutes it every five years to review the finances of local bodies and recommend how state taxes, duties, tolls and grants are shared with them. That mandate is what makes it constitutional, not merely statutory.

• A) Legal body: Too vague. Every constitutional body is legal in a broad sense, but the question asks for the precise status, and that is constitutional.
• B) Non-statutory body: Wrong. Its existence is guaranteed by the Constitution itself, so it cannot be called non-statutory.
• D) None of the above: Wrong, since option C is correct.

The core concept is fiscal federalism at the third tier of government. Mains often asks why local bodies remain financially weak despite the 73rd and 74th Amendments, and the SFC's recommendations, and the states' follow-through on them, are central to that answer.

Trap: Aspirants confuse the State Finance Commission with the Union Finance Commission under Article 280. The Union body is also constitutional, but it deals with Centre-State tax sharing, not local bodies.