Which of the following statements with regard to recommendations of the 15th Finance Commission of I

Question

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.

Accepted Answer

Statement I is correct: XVFC has recommended grants of Rs. 4,800 crore (Rs. 1,200 crore each year) from 2022-23 to 2025-26 for incentivising the States to enhance educational outcomes. Statement II is not correct: In order to maintain predictability and stability of resources, especially during the pandemic, XVFC has recommended maintaining the vertical devolution at 41 per cent – the same as in our report for 2020-21. It is at the same level of 42 per cent of the divisible pool as recommended by FC-XIV. However, it has made the required adjustment of about 1 per cent due to the changed status of the erstwhile State of Jammu and Kashmir into the new Union Territories of Ladakh and Jammu and Kashmir. Statement III is correct: XVFC has recommended that Rs. 45,000 crore be kept as performance-based incentive for all the States for carrying out agricultural reforms. Statement IV is correct: XVFC has re-introduced tax effort criterion to reward fiscal performance.