Which of the following statements is correct about the Fourteenth Finance Commission?
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1 mark, −0.333Public EconomicsFiscal federalism and Finance CommissionsFinance Commissions and devolutionModerateabout 1 min
GATE 2023 Question 38: Fiscal federalism and Finance Commissions
Answer and worked solution
Answer: (C)
The Fourteenth Finance Commission (India) was chaired by Dr. Y. V. Reddy, not Dr. C. Rangarajan — (A) is incorrect.
The electricity-metering recommendation described in (B) is unrelated to the Fourteenth Finance Commission's actual scope — incorrect.
(C) is correct: the Commission's most widely cited recommendation was a substantial increase in states' share of the divisible tax pool, from 32% to 42% — one of the largest jumps in Indian fiscal federalism history.
The Commission's mandate period was 2015-2020, not 2010-2015 as stated in (D) — incorrect.
Therefore the answer is (C).
The trap: (A) The Commission was chaired by Dr. C. Rangarajan.
Dr. C. Rangarajan is a prominent, frequently-referenced Indian economist associated with several government committees, which can make him feel like a plausible chair for any major commission — students who don't recall the specific chair (Y.V. Reddy) may default to a more 'famous name' answer.
Fiscal federalism and Finance Commissions has come up 30 times in 5 exams since 2012.
What this question tests
This question is on Finance Commissions and devolution, part of Fiscal federalism and Finance Commissions in Public Economics.
The constitutional body that recommends how tax revenue is shared between the Union and the states.
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Question from the GATE 2023 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.