Question

Q. Consider the following statements with respect to Finance Commission (FC) for Financial year 2020-21:

Which of the statements given above is/are correct?

• A. 1 only
• B. 2 only
• C. Both 1 and 2
• D. Neither 1 or 2

Answer 1

The correct option is C Both 1 and 2

Explanation:

Statement 1 is correct: The Finance Commission has the following functions or duties:

• The Commission makes recommendations to the President of India on the distribution of tax proceeds between the Union and the States and the share of each state.
• The Commission also decides the principles that govern the payment of grants-in-aid to states from the Consolidated Fund of India.
• The President of India can also refer any other matter to the Finance Commission in the interest of building a sound financial system.

Statement 2 is correct: 15th FC has recommended a grant of Rs 7,375 crore for nutrition in 2020-21. In the final report FC has included various sectors for sector specific grants: (i) health ,(ii) nutrition, (iii) railways, (iv) judiciary, and (v) pre-primary education.