UPSC CSE 2025 · PYQ · Finance Commission / 15th FC Recommendations · hard
Which of the following statements with regard to recommendations of the 15th Finance Commission of India are correct?
I. 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.
II. 45% of the net proceeds of Union taxes are to be shared with States.
III. ₹45,000 crores are to be kept as performance-based incentive for all States for carrying out agricultural reforms.
IV. It reintroduced tax effort criteria to reward fiscal performance.
Select the correct answer using the code given below.
A.I, II and III
B.I, II and IV
C.I, III and IV✓ Correct
D.II, III and IV
Explanation
The 15th Finance Commission recommended ₹4,800 crores as performance grants to States for enhancing educational outcomes during 2022-23 to 2025-26 (I correct). It recommended 41% (not 45%) of the net proceeds of Union taxes to be devolved to States, with the reduction from 42% accounting for the new UTs of J&K and Ladakh (II incorrect). It recommended ₹45,000 crores as performance-based incentive for States for agricultural reforms (III correct). It reintroduced the tax effort criterion (weight 2.5%) to reward States for higher tax collection efficiency (IV correct).
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