Consider the following statements:
1) The 14th Finance Commission recommended increasing in the share of tax devolution to 42% of total divisible pool from 32% during the 13th Finance Commission.
2) Cess and Surcharges were not made the part of the divisible pool as it would have brought down the revenue of the Central Government.
3) The 14th Finance Commission has recommended doing away with ‘post-devolution revenue deficit grants’; which was implemented after the recommendation of 13th Finance Commission.
Select the correct statement(s):
Only 1
The commission said since cess and surcharges are not part of the divisible pool of central taxes, states need to be compensated with a higher percentage devolution from central tax pool. The share of cess and surcharges in gross tax revenue of the Union government increased from 7.53% in 2000-01 to 13.14% in 2013-14.
The commission has done away with the distinction between special and general category states. Instead, it has provided post-devolution revenue deficit grants for 11 states where devolution alone could not cover the assessed gap. It has also recommended doing away with plan and non-plan distinction in revenue expenditure of state governments. It has minimized the use of conditionalities and incentives while increasing untied transfers.