Consider the following:Demographic performanceForest and ecologyGovernance reformsStable governmentT

Question

Consider the following:Demographic performanceForest and ecologyGovernance reformsStable governmentTax and fiscal effortsFor the horizontal tax devolution, the Fifteenth Finance Commission used how many of the above as criteria other than population area and income distance?

Accepted Answer

Based on principles of need, equity and performance, overall devolution formula is as follows:Criteria Weight(%)Population - 15.0Area - 15.0Forest & ecology - 10Income distance - 45Tax & fiscal efforts - 2.5Demographic performance - 12.5On horizontal devolution, while XVFC agreed that the Census 2011 population data better represents the present need of States, to be fair to, as well as reward, the States which have done better on the demographic front, XVFC has assigned a 12.5 per cent weight to the demographic performance criterion. XVFC has re-introduced tax effort criterion to reward fiscal performance.