Polity
2015
Finance Commission
Federalism in India
With reference to the Fourteenth Finance Commission, which of the following statements is/are correct?
- It has increased the share of States in the central divisible pool from 32 percent to 42 percent
- It has made recommendations concerning sector-specific grants
Select the correct answer using the code given below.
B.2 only
C.Both 1 and 2
D.Neither 1 nor 2
A.1 only
Correct Answer: Option A
The Fourteenth Finance Commission significantly altered the fiscal landscape between the Union and the States.
Statement 1: Correct. The commission recommended increasing the states' share in the net proceeds of central taxes to 42%. This was a substantial increase from the 32% recommended by the Thirteenth Finance Commission. This marked the largest-ever change in the percentage of devolution.
Statement 2: Incorrect. The Fourteenth Finance Commission did not make recommendations concerning sector-specific grants.
Hence, only statement 1 is correct.
Sources:
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