Question

4. The fifteenth Finance Commission has
reduced the vertical devolution from
42% to 41%. Which among the following
parameters was not considered in
taking the decision ?
(1) Forest Cover
(2) Area of the State
(3) Income Tax collected by the State
(4) Demographie Performance​

Answer 1

Answer:

1)The 14th Finance Commission is of the view that tax devolution should be the primary route for transfer of resources to the States. 4)In recommending an horizontal distribution, it has used broad parameters – population (1971), changes in population since then, income distance, forest cover and area, among others.The fourteenth finance commission is of the view that tax devolution should be the primary route of resources to the states. The commission recommends to increase the tax devolution of the divisible pool to states to 42% for years 2015 to 2020. This is 10% more compared to 32% target set by 13th financial commission.