by Q. Which of the following statements with regard to recommendations of the 15th Finance Commission of India are correct?
UPSC Civil Services Examination (Prelims) 2025 – General Studies Paper I
Select the correct answer using the code below:
(a) I, II and III
(b) I, II and IV
(c) I, III and IV
(d) II, III and IV
Answer: (c) I, III and IV
Explanation:
I. Grants of ₹48,000 crores for education outcomes
The 15th Finance Commission recommended sector-specific grants, including ₹48,000 crores to incentivize States to improve educational outcomes during the award period. Hence, this statement is correct.
II. 45% of net proceeds of Union taxes to States
This statement is incorrect. The 15th Finance Commission recommended 41% vertical devolution of the net proceeds of Union taxes to the States (reduced from 42% due to the creation of the Union Territory of Jammu & Kashmir).
III. ₹45,000 crores as performance-based incentive for agricultural reforms
The Commission recommended ₹45,000 crores as performance-based grants to encourage States to undertake agricultural reforms. This statement is correct.
IV. Reintroduction of tax effort criterion
The tax effort criterion was reintroduced by the 15th Finance Commission to reward States showing better fiscal performance. Hence, this statement is correct.
Since Statements I, III, and IV are correct, the correct answer is (c) I, III and IV.
Answer: (c) I, III and IV
