Set A - UPSC Prelims 2025 Solutions

QQuestion

Which of the following statements with regard to recommendations of the 15th Finance Commission of India are correct? I. It has recommended grants of ₹ 4,800 crores from the year 2022-23 to the year 2025-26 for incentivizing States to enhance educational outcomes. II. 45% of the net proceeds of Union taxes are to be shared with States. III. ₹ 45,000 crores are to be kept as performance-based incentive for all States for carrying out agricultural reforms. IV. It reintroduced tax effort criteria to reward fiscal performance. Select the correct answer using the code given below.

OOptions

A) I, II and III

B) I, II and IV

C) I, III and IV

D) II, III and IV

✓Correct Answer

C) I, III and IV

DDalvoy Solutions

Analyzing the 15th Finance Commission recommendations:

I. ₹4,800 crores grants for educational outcomes (2022-23 to 2025-26): Correct. The Commission recommended performance-based grants to incentivize states to improve educational outcomes.

II. 45% of net proceeds of Union taxes to be shared with States: Incorrect. The 15th Finance Commission recommended 41% share for states, not 45%. This was actually a reduction from the 14th Finance Commission's recommendation of 42%.

III. ₹45,000 crores for agricultural reforms performance incentive: Correct. The Commission allocated this amount as performance-based incentives for states undertaking agricultural and rural development reforms.

IV. Reintroduced tax effort criteria for fiscal performance: Correct. The Commission reintroduced tax effort as a criterion to reward states that make greater efforts in tax collection and fiscal management.

Solution Diagram for Q<built-in function id>

SUPSC Prelims Strategy and Tips

For Finance Commission recommendations, pay attention to specific percentages and amounts. The devolution percentage is often a key point of debate and changes between commissions.

SUPSC Prelims 2025 Syllabus Analysis

Polity & Governance - Finance Commission and Centre-State financial relations

AUPSC Prelims 2025 Question Analysis

Hard difficulty - requires detailed knowledge of 15th Finance Commission specific recommendations

Question 66

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