I. It has recommended grants of ₹ 4,800 crores from the year 2022-23 to the year 2025-26 for incentivizing States to enhance educational outcomes.

II. 45% of the net proceeds of Union taxes are to be shared with States.

III. ₹ 45,000 crores are to be kept as performance-based incentive for all States for carrying out agricultural reforms.

IV. It reintroduced tax effort criteria to reward fiscal performance.

Select the correct answer using the code given below.

(a) I, II and III

(b) I, II and IV

(c) I, III and IV

(d) II, III and IV

Ans-c

Explanation

XVFC has recommended grants of Rs. 4,800 crore (Rs. 1,200 crore each year) from 2022-23 to 2025-26 for incentivising the States to enhance educational outcomes.

Hence statement  1 is correct

45000 crore for implementation of agricultural reforms

Hence statement 3 is correct

XVFC has recommended maintaining the vertical devolution at 41 per cent – the same as in our report for 2020-21. It is at the same level of 42 per cent of the divisible pool as recommended by FC-XIV. However, it has made the required adjustment of about 1 per cent due to the changed status of the erstwhile State of Jammu and Kashmir into the new Union Territories of Ladakh and Jammu and Kashmir.

Hence statement 2 is incorrect

Horizontal devolution:

Based on principles of need, equity and performance, overall devolution formula is as follows.

Hence statement 4 is correct

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