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    Question

    With reference to 15th Finance Commission,

    For horizontal devolution, it has suggested ______ % weightage to demographic performance, 45% to income, 15% each to population and area, 10% to forest and ecology and ______ % to tax and fiscal efforts. Fill in the blanks.
    A 10% and 5% Correct Answer Incorrect Answer
    B 5% and 10% Correct Answer Incorrect Answer
    C 2.5% and 12.5% Correct Answer Incorrect Answer
    D 12.5% and 2.5% Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    Solution

    Vertical Devolution (Devolution of Taxes of the Union to States): It has recommended maintaining the vertical devolution at 41% and Horizontal Devolution means these 41% will be divided among different states based on the following formula. For horizontal devolution, it has suggested 12.5% weightage to demographic performance, 45% to income, 15% each to population and area, 10% to forest and ecology and 2.5% to tax and fiscal efforts.  

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