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.
A
1 only
Correct Answer
B
2 only
C
Both 1 and 2
D
Neither 1 nor 2
Explanation
The 14th Finance Commission significantly increased the states' share in the central divisible pool from 32% to 42% to enhance fiscal autonomy. Statement 2 is incorrect because the commission explicitly moved away from recommending sector-specific grants, preferring to provide states with higher unconditional transfers instead. This question tests the core concept of vertical devolution and the evolving nature of fiscal federalism in India.
Finance Commission14th Finance Commission RecommendationsFourteenth Finance CommissionArticle 280Divisible Pool of TaxesY.V. ReddySector-specific grants