UPSC Prelims 2025 · GS Paper I
Question 66: Economy and Social Development
Which of the following statements with regard to recommendations of the 15th Finance Commission of India are correct?
- IIt has recommended grants of ₹ 4,800 crores from the year 2022–23 to the year 2025–26 for incentivizing States to enhance educational outcomes.
- II45% of the net proceeds of Union taxes are to be shared with States.
- III₹ 45,000 crores are to be kept as performance-based incentive for all States for carrying out agricultural reforms.
- IVIt reintroduced tax effort criteria to reward fiscal performance.
Select the correct answer using the code given below.
AnswerThe answer is (c).
The 15th Finance Commission recommended a share of 41 per cent, not 45 per cent, of the divisible pool for States, after allowing for the change in status of Jammu and Kashmir and Ladakh, so Statement II is wrong. It recommended performance-based incentives, including 4,800 crore for incentivising States to improve educational outcomes in 2022-23 to 2025-26 and 45,000 crore for agricultural reforms. It also brought back a tax and fiscal effort criterion in the devolution formula. So I, III and IV are correct.
- I. A grant of 4,800 crore for educational outcomes was recommended for 2022-23 to 2025-26.
- II. The States' share was fixed at 41 per cent, not 45 per cent.
- III. 45,000 crore was kept as performance-based incentive for agricultural reforms.
- IV. A tax and fiscal effort criterion was brought back in the devolution formula.
How you could have got this
- If you were sure statement II is not correct, (a), (b) and (d) go: each of them includes II.
What you needed to know: The States' share was fixed at 41 per cent, not 45 per cent.
Only (c) is left. You didn’t need statements 1, 3 or 4.
This follows an unofficial answer: UPSC has not published its key for this year, and if that answer is wrong, so is this path.
Which options go is worked out from UPSC’s key and the options, not by a model.
Why each option is right or wrong
- (a) Wrong: II gives 45 per cent, but the share is 41 per cent.
- (b) Wrong: II gives 45 per cent, and III on agricultural reform incentives is left out.
- (c) Right: I, III and IV match the 15th Finance Commission report.
- (d) Wrong: II is incorrect, and I on education is correct but left out.
Explanation: written by UPSC Grade, not by UPSC.
Source: UPSC, Civil Services (Preliminary) Examination 2025, General Studies Paper I, Series A. The paper on upsc.gov.in.