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The 15th Finance Commission (2020-25) used 2011 census data for population criterion in horizontal devolution, marking a shift from the long-standing use of 1971 census, while balancing equity and efficiency through multiple criteria.
- True
- False
Answer: True
15th Finance Commission horizontal distribution: (a) Population criterion: Used 2011 census (15% weight) alongside 1971 census (15% weight), marking shift from exclusive 1971 basis, (b) Rationale: 1971 census rewarded States controlling population growth; 2011 census reflects demographic reality but risks penalizing high-fertility States, (c) Balancing mechanism: Added 'demographic performance' criterion (12.5% weight) to reward States controlling population, (d) Full criteria mix: (i) Income distance (45%): Needier States get more, (ii) Population 1971/2011 (30%): Balance historical equity with current reality, (iii) Area (15%): Compensate for geographical challenges, (iv) Forest cover (10%): Reward environmental conservation, (v) Demographic performance (12.5%): Incentivize population control, (e) Impact: More equitable distribution while maintaining incentives for development, (f) Illustrates fiscal federalism evolution: Technical criteria mediating political claims; balancing equity (needier States) with efficiency (rewarding reforms).