With reference to the Fourteenth Finance Commission, which of the following statements is/are correct?

1. It has increased the share of States in the central divisible pool from 32 percent to 42 percent.
2. It has made recommendations concerning sector-specific grants.

Select the correct answer using the code given below:

1. 1 only
2. 2 only
3. Both 1 and 2
4. Neither 1 nor 2

Explanation

Statement 1 is correct

• 14^TH FC Chairman: Mr Y.V. Reddy (Former Governor of the Reserve Bank of India).
• It recommended an increase in the share of states in the centre’s tax revenue from 32 per cent to 42 per cent. This was indeed the single largest increase ever recommended by a Finance Commission.

Statement 2 is incorrect

• The FFC has not made any recommendation concerning sector specific-grants unlike the Thirteenth Finance Commission.

Answer: (a) 1 only; Difficulty Level: Hard