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Which of the following is not recommended by the 15th Finance Commission in its 1st Report submitted in February 2020?
  • a)
    Reintroduced performance-based incentives to states.
    setting up National and State Disaster Management Funds (NDMF and SDMF) for the
  • b)
    Promotion of local-level mitigation activities.
  • c)
    Reduction in the vertical devolution of the divisible tax pool to 40%
  • d)
    None of the above
Correct answer is option 'C'. Can you explain this answer?
Verified Answer
Which of the following is not recommended by the 15th Finance Commiss...
  • Option A is correct: Demographic Performance criterion which has been introduced by the 15th Finance Commission. The Demographic Performance criterion is to reward efforts made by states in controlling their population. The 15th Finance Commission used the following criteria while determining the share of states:
    (i) 45% for the income distance,
    (ii) 15% for the population in 2011,
    (iii) 15% for the area,
    (iv) 10% for forest and ecology,
    (v) 12.5% for demographic performance, and
    (vi) 2.5% for tax effort.
  • Option B is correct: The Commission recommended setting up National and State Disaster Management Funds (NDMF and SDMF) for the promotion of local-level mitigation activities. The Commission has recommended retaining the existing cost-sharing patterns between the centre and states to fund the SDMF (new) and the SDRF (existing). The cost-sharing pattern between centre and states is
    (i) 75:25 for all states, and
    (ii) 90:10 for north-eastern and Himalayan states.
  • For 2020-21, State Disaster Risk Management Funds have been allocated Rs 28,983 crore, out of which the share of the union is Rs 22,184 crore. The National Disaster Risk Management Funds has been allocated Rs 12,390 crore.
  • Option C is incorrect: The Commission has recommended a total devolution of Rs 8,55,176 crore to the states, which is 41% of the divisible pool of taxes.
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Which of the following is not recommended by the 15th Finance Commission in its 1st Report submitted in February 2020?a)Reintroduced performance-based incentives to states.setting up National and State Disaster Management Funds (NDMF and SDMF) for theb)Promotion of local-level mitigation activities.c)Reduction in the vertical devolution of the divisible tax pool to 40%d)None of the aboveCorrect answer is option 'C'. Can you explain this answer?
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