Population of the year 2011 was first introduced in the tax devolution formula for sharing Union tax revenue with the States by
- A.Thirteenth Finance Commission
- B.Fifteenth Finance Commission
- C.Fourteenth Finance Commission
- D.Twelfth Finance Commission
Correct answer
Explanation
The correct answer is C, Fourteenth Finance Commission. Chaired by Y. V. Reddy, it brought the 2011 Census into the devolution formula for the first time, through a criterion called demographic change.
The Fourteenth Finance Commission (award period 2015-20) gave 17.5% weight to the 1971 population and 10% to the 2011 population, alongside income distance (50%), area (15%) and forest cover (7.5%). It also raised the States' share of the divisible pool from 32% to 42%. Until then, commissions had used only the 1971 population, as their terms of reference required, so that States that controlled population growth were not penalised. The Fifteenth Finance Commission under N. K. Singh then used the 2011 population alone, with 15% weight, and added a separate demographic performance criterion.
Why the others are wrong: A, the Thirteenth Finance Commission (2010-15) used the 1971 population. B, the Fifteenth used the 2011 figures, but after the Fourteenth had already introduced them. D, the Twelfth Finance Commission (2005-10) used only the 1971 population.
Exam tip: 14th FC, Y. V. Reddy, first used 2011 population and raised the States' share to 42%; 15th FC, N. K. Singh, 41%.
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