Who amongst the following is responsible for revenue sharing between the State Government and the Local Government?

The correct answer is C, but the option is worded loosely. The body meant here is the State Finance Commission (SFC), set up under Article 243I for Panchayats and applied to Municipalities through Article 243Y. The Governor constitutes it every five years. It recommends how taxes, duties, tolls and fees are divided between the State and local bodies, and the principles for grants-in-aid to them.

Why the others fail:

• A) Chief Minister: The CM is the head of the state executive. The sharing is decided on the SFC's recommendations, not by the CM's discretion.
• B) Governor: The Governor is the constitutional head and appoints the SFC, but does not decide the sharing formula personally. Aspirants often confuse appointing power with decision-making power.
• D) None of the above: Wrong, since C is correct in context.

The core concept is fiscal federalism at the third tier, introduced by the 73rd and 74th Amendments. For Mains, this links to local body finances, the weak own-revenue base of municipalities, and why SFCs are often criticised for delayed constitution.

Trap: Do not pick the Union Finance Commission (Article 280), which handles Centre-State sharing of the divisible pool. The option says only "The Finance Commission", so read it as the State Finance Commission in this question.