GK Question

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The 15th Finance Commission (2020-25) recommended ______ percent vertical devolution of Union tax revenues to States, using criteria like population (1971/2011), area, forest cover, income distance, and demographic performance.

  1. 32%
  2. 41%
  3. 45%
  4. 50%

Answer: 41%

15th Finance Commission (Chairman: N.K. Singh): Key recommendations: (a) Vertical devolution: 41% of Union tax revenues to States (down from 42% by 14th FC due to creation of J&K UTs), (b) Horizontal distribution criteria: Population (1971:15%, 2011:15%), Area (15%), Forest cover (10%), Income distance (45%), Demographic performance (12.5%), Tax effort (2.5%), (c) Sector-specific grants: Health, education, rural local bodies. Balances equity (needier States get more) with efficiency (rewarding reforms). Illustrates fiscal federalism in practice: technical criteria mediating political claims.

Topic Federalism - Finance Commission Recommendations
Exam Relevance Fiscal federalism criteria question frequently asked in UPSC and SSC exams
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