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 ✓ UPSC's answer
- (b) 2 only
- (c) Both 1 and 2
- (d) Neither 1 nor 2
Why the answer is (a)
• The 14th Finance Commission (Y.V. Reddy, 2015–20) raised the States' share of the divisible pool of central taxes from 32% to 42%, the largest-ever increase (statement 1).
• Statement 2 is wrong: it deliberately moved away from sector-specific and scheme-based grants, recommending only untied tax devolution plus grants to local bodies and disaster relief, leaving sectoral spending to the States.
• Hence 1 only, option (a).
Why the other options are wrong
- (b) 2 only
- Statement 2 is wrong: it avoided sector-specific grants.
- (c) Both 1 and 2
- Statement 2 is wrong.
- (d) Neither 1 nor 2
- Statement 1 is correct: devolution rose to 42%.
Asked in the GS Paper I of the UPSC Civil Services Preliminary Examination 2015, held on 23 August 2015. Question and answer key: Union Public Service Commission. Explanation: UPSC Answer Check.