Consider the following: 1. Demographic performance 2. Forest and ecology 3. Governance reforms 4. Stable government 5. Tax and fiscal efforts For the horizontal tax devolution, the Fifteenth Finance Commission used how many of the above as criteria other than population area and income distance?
- AOnly two
- BOnly threeCorrect
- COnly four
- DAll five
Explanation
The Fifteenth Finance Commission used several criteria for horizontal tax devolution (distribution of divisible pool among states) apart from population, area, and income distance. The specific criteria and their weights were:
-
Demographic Performance: This criterion was introduced to reward states that have performed well in controlling population growth. It was given a weight of 12.5%.
-
Forest and Ecology: This criterion recognized the importance of forest cover and environmental conservation, allocating a weight of 10%.
-
Governance reforms: This was a recommendation or consideration by the Finance Commission in its report, but it was not adopted as a specific criterion with a weightage for horizontal tax devolution in the final scheme.
-
Stable government: This is not a criterion used for horizontal tax devolution by the Finance Commission.
-
Tax and fiscal efforts: This criterion rewarded states that have shown prudence and effort in their own tax collection and fiscal management. It was given a weight of 2.5%.
Therefore, Demographic performance, Forest and ecology, and Tax and fiscal efforts were the three criteria used by the Fifteenth Finance Commission for horizontal tax devolution, in addition to population, area, and income distance.

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