The Commission shall make recommendations relating to the following matters:-

(i)   The principles that should govern-

(a) the distribution between State and Panchayati Raj Institutions and the Municipalities of the net proceeds of taxes, duties, tolls and fees leviable by the State which may be divided amongst them under PartIX and PartIXA of the Constitution and the allocation between the Panchayats at all levels and the Municipalities of their respective shares of such proceeds;

(b) the determination of taxes, duties, tolls and fees which may be assigned to, or appropriated by Grama Panchayats, Panchayat Samities and Zilla Parishads or, as the case may be, Municipalities; and

(c) the Grants-in-aid to the Grama Panchayats, Panchayat Samitis, Zilla Parishads or, as the case may be, Municipalities from the Consolidated Fund of the State;

(ii)  the measures needed to improve the financial position of the Grama Panchayats, Panchayat Samitis, Zilla Parishads and Municipalities;

(iii)  on any other matter, which the Governor, may refer to the Commission in the interest of sound finance of Grama Panchayats, Panchayat Samities, Zilla Parishads and Municipalities.