UPSC CSE Prelims
Question 18
Which of the following statements with regard to recommendations of the 15th Finance Commission of India are correct?
- It has recommended grants of ₹4,800 crores from the year 2022-23 to the year 2025-26 for incentivizing States to enhance educational outcomes.
- 45% of the net proceeds of Union taxes are to be shared with States.
- ₹45,000 crores are to be kept as performance-based incentive for all States for carrying out agricultural reforms.
- It reintroduced tax effort criteria to reward fiscal performance.
Select the correct answer using the code given below.
View correct answer and explanation
Correct answer: C
Correct Option: C (I, III and IV)
Explanation: The 15th Finance Commission recommended 41% tax devolution to states, not 45%. The specified education grants, agricultural reform incentive envelope and inclusion of the tax-effort criterion align with its recommendations.
Statement / Pair / Item-wise Analysis:
I: True-₹4,800 crore was recommended as incentive grants for education outcomes.
II: False-states' vertical share was fixed at 41%.
III: True-₹45,000 crore was recommended for agriculture-reform incentives.
IV: True-tax effort was used as a devolution criterion.
Option-wise Analysis:
A. Incorrect-includes II despite the item-wise findings; omits IV which the answer requires.
B. Incorrect-includes II despite the item-wise findings; omits III which the answer requires.
C. Correct-this matches the facts and the item-wise assessment above.
D. Incorrect-includes II despite the item-wise findings; omits I which the answer requires.