Choose if the given statement is True/False.

In federalism sources of revenue are fixed to ensure financial autonomy.

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True

False

answer is A.

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Detailed Solution

The given statement is true.
States do possess financial authority or independent revenue streams. Income, sales, and other taxes, fines, challans, GST and fees, transfers from the federal government, and other levies and fees are how the state government is funded. States have independent sources of income and are not reliant on the federal government for funding or revenue. However, the separation of powers between the federal and State governments is made possible by the federal form of government. The Constitution precisely outlines both the federal government's and state government's revenue sources, indicating what their primary sources of income are in order to ensure their financial independence.

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