Consider the following:
1. Demographic performance
2. Forest and ecology
3. Governance reforms
4. Stable government
5. Tax and fiscal efforts
For the horizontal tax devolution, the Fifteenth Finance Commission use how many of the above as criteria other than population area and income distance?
(a) Only two
(b) Only three
(c) Only four
(d) All five
Answer: B
The correct answer is Only three.
The Fifteenth Finance Commission used the following criteria for horizontal tax devolution:
- Population (15%)
- Area (15%)
- Income distance (45%)
- Demographic performance (12.5%)
- Forest and ecology (10%)
- Tax and fiscal efforts (2.5%)
Therefore, the three criteria other than population, area, and income distance are demographic performance, forest and ecology, and tax and fiscal efforts.
