| With reference to the Fourteenth Finance Commission, which of the following statement(s) is/are correct? |
| 1. It has increased the share of States in the central divisible pool from 32% to 42%. |
| 2. It has made recommendations concerning sector-specific grants. |
| Select the correct answer using the codes given below. |
A) Only 1
B) Only 2
C) Both 1 and 2
D) Neither 1 nor 2
Correct Answer: A
Solution :
Exp. [a] The Fourteenth Finance Commission's (FC's) recommendation increasing the share of States in Central taxes to 42% from the current 32%, but the share of nine States has decreased. Andhra Pradesh (including Telangana), Assam, Bihar, Himachal Pradesh, Odisha, Rajasthan, Tamil Nadu, Uttar Pradesh and Uttarakhand in fact stand to lose in the Commission's recommendations. The 14th FC has not recommended sector specific grants (except few like Local Body Grant). Based on 13th FC recommendations, these grants in aid accounted to 7% of net transfers from Centre to State. Hence, option [a] is correct
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