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 used 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
The correct answer is (c), Only four.
Explanation:
The 15th Finance Commission in India used multiple criteria for horizontal tax devolution. These criteria included population (1971 and 2011 data), area, forest and ecology, income distance, and demographic performance.
From the list:
- Demographic performance – This was included as a criterion by the Fifteenth Finance Commission.
- Forest and ecology – This was also included as a criterion by the Fifteenth Finance Commission.
- Governance reforms – Governance reform was not a criterion used by the Fifteenth Finance Commission for horizontal tax devolution.
- Stable government – Stable government was not a criterion used by the Fifteenth Finance Commission for horizontal tax devolution.
- Tax and fiscal efforts – This was also included as a criterion by the Fifteenth Finance Commission.
So, of the listed criteria, three — demographic performance, forest and ecology, and tax and fiscal efforts — were used by the Fifteenth Finance Commission in addition to population, area, and income distance.
Therefore, the answer is (b) Only three.
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