With reference to the Fourteenth Finance Commission, which of the following statements is/are correct?
- 1.It has increased the share of States in the central divisible pool from 32 percent to 42 percent.
- 2.It has made recommendations concerning sector-specific grants.
Select the correct answer using the code given below:
- A.1 only
- B.2 only
- C.Both 1 and 2
- D.Neither 1 nor 2
▶ Answer & Explanation
Correct answer: A. 1 only
The Fourteenth Finance Commission significantly enhanced the fiscal autonomy of states by recommending an increase in their share of the divisible pool of central taxes from 32% to 42%. This was a major shift towards fiscal federalism. However, the commission's focus was on increasing the untied funds available to states, and it de-emphasized specific, sector-based grants, recommending a reduction in their number and scope compared to previous commissions. Its primary recommendation was the elevated share in central taxes, with a view to reducing the need for specific grants.
Source: UPSC gs1 2015