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.
Answer & explanation
Answer: (a) 1 only
The Fourteenth Finance Commission raised the States' share of the divisible pool from 32% to 42%. It made no recommendation on sector-specific grants, which the Thirteenth Finance Commission had made. So only statement 1 is correct.
- ✓ 1. The Fourteenth Finance Commission (period 2015-20) raised States' share in the divisible pool of central taxes from 32% to 42%. This was the biggest ever increase in vertical tax devolution.
- ✗ 2. The Commission gave grants to rural and urban local bodies, plus disaster relief and revenue deficit grants. It made no recommendation on sector-specific grants, unlike the Thirteenth Finance Commission. The aim was to give States more untied funds.
Remember · 14th Finance Commission (2015-20): States' share 42% (up from 32%), more untied transfers, and no sector-specific grants. Its grants went to local bodies, disaster relief and revenue deficit.
Sources
- Economic Survey 2014-15, Vol. 1, Ch. 10 (Fiscal Federalism: Fourteenth Finance Commission) ↗ “The FFC has radically enhanced the share of the states in the central divisible pool from the current 32 percent to 42 per cent which is the biggest ever increase in vertical tax devolution. … The FFC has not made any recommendation concerning sector specific-grants unlike the Thirteenth Finance Commission.”
Question: UPSC Civil Services (Preliminary) 2015, General Studies Paper I. Explanation: Minimalist IAS, checked 25 Oct 2026 (how we verify). ·
