Q. The 15th finance commission has used ‘’income distance’ as criteria for horizontal devolution of the divisible pool of taxes. What is ‘income distance’?

Difference between per capita GSDP (Gross State Domestic Product) of a state and the per capita (Gross Domestic Product) GDP of India.

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Difference between per capita GSDP (Gross State Domestic Product) of a state and the per capita GSDP of the state having the highest GSDP per capita.

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Difference between per capita GSDP (Gross State Domestic Product) of a state and the per capita GSDP of the state having the lowest GSDP per capita.

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None of the above

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Solution

The correct option is B Difference between per capita GSDP (Gross State Domestic Product) of a state and the per capita GSDP of the state having the highest GSDP per capita.
Explanation:

Income distance is the distance of the state’s income from the state with the highest income. The income of a state has been computed as the average per capita GSDP (Gross State Domestic Product) during the three-year period between 2015-16 and 2017-18. States with lower per capita income would be given a higher share to maintain equity among states.

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Similar questions

Q. Q. Which of the following is/are used as criteria by the 15^th Finance Commission for devolution of taxes to states from the Consolidated Fund of India?Choose the correct answer using the codes given below:

1 only
2, 3, and 4 only
1 and 5 only
1, 2, 3, 4 and 5

Q. Which of the following is/are used as criteria by the 15^th Finance Commission for devolution of taxes to states from the Consolidated Fund of India?

Choose the correct answer using the codes given below:

1 only
2, 3 and 4 only
1 and 5 only
1, 2, 3, 4 and 5

Q. Which of the following is/are used as a criteria by the 15^th Finance Commission for devolution of taxes to states from the Consolidated Fund of India?

Choose the correct answer using the codes given below:

1 only
2, 3 and 4 only
1 and 5 only
1, 2, 3, 4 and 5

Q. Q. Which among the following are the criteria under which the 15^th Finance Commission (FC) made recommendations for the distribution of net proceeds?Choose the correct option from the codes given below:

1 and 2 only
2 and 4 only
1 and 3 only
1, 2, 3 and 4

Consider the following statements:

1) The 14^th Finance Commission recommended increasing in the share of tax devolution to 42% of total divisible pool from 32% during the 13^th 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 14^th Finance Commission has recommended doing away with ‘post-devolution revenue deficit grants’; which was implemented after the recommendation of 13^th Finance Commission.

Select the correct statement(s):

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