What is the percentage weightage assigned to Forest and Ecology in the devolution formula given by the Fifteenth Finance Commission of India for sharing of Union tax revenue with the States?
- A.10%
- B.15%
- C.7.5%
- D.2.5%
Correct answer
Explanation
The correct answer is A, 10%. The Fifteenth Finance Commission gave forest and ecology a weight of 10 per cent in deciding each State's share of the divisible pool of Union taxes.
The Finance Commission is set up under Article 280. The Fifteenth Commission, chaired by N. K. Singh, recommended that 41 per cent of the divisible pool go to the States for 2021–26. Each State's share was worked out from six criteria: income distance 45 per cent, population (2011) 15 per cent, area 15 per cent, forest and ecology 10 per cent, demographic performance 12.5 per cent and tax and fiscal efforts 2.5 per cent. The forest criterion rewards States with dense forest cover, which give up land for conservation.
B is wrong because 15 per cent was the weight of population and of area. C is wrong because 7.5 per cent was not used for any criterion. D is wrong because 2.5 per cent was the weight of tax and fiscal efforts.
Exam tip: 15th FC weights: income distance 45, population 15, area 15, demographic performance 12.5, forest 10, tax effort 2.5.
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