Question
Which of the following statements with regard to recommendations of the 15th Finance Commission of India are correct?
I. It has recommended grants of Rs. 4,800 Crores from the year 2022-23 to the year 2025-26 for incentivizing States to enhance educational outcomes.
II. 45% of the net proceeds of Union taxes are to be shared with States.
III. Rs. 45,000 crores are to be kept as performance-based incentive for all States for carrying out agricultural reforms.
IV. It reintroduced tax effort criteria to reward fiscal performance.
Select the correct answer using the code given below.
AI, II and III
BI, II and IV
CI, III and IV
DII, III and IV
Correct Answer: C
Explanation
The
15th Finance Commission sought to balance
fiscal devolution with
performance incentives, linking transfers to outcomes in key sectors.
Statement I is correct. It provided
specific grants for education outcomes amounting to
₹4,800 crore over the period
2022–23 to 2025–26, encouraging States to improve learning indicators.
Statement II is incorrect. The share of States in the divisible pool was fixed at
41%, not 45%. The reduction from the earlier
42% accounts for the restructuring of
Union Territories.
Statement III is correct. A significant
₹45,000 crore was earmarked as a
performance-based incentive to promote
agricultural reforms.
Statement IV is correct. The Commission reintroduced
‘tax and fiscal effort’ (with
2.5% weightage) to reward States with
better revenue mobilization.
Thus,
Statements I, III and IV are correct.