Fiscal Federalism & Finance Commission MCQ — 128 Practice Questions with Answers

Q1. Consider the following statements: 1. The Sixteenth Finance Commission was to recommend distribution of net tax proceeds between the Union and the States. 2. It was to recommend allocation among States of the respective shares of such proceeds. 3. It was to recommend principles governing grants-in-aid of State revenues out of the Consolidated Fund of India. 4. It was constituted to decide repo rate changes for the Reserve Bank of India. Which of the statements given above are correct?

Q2. The CAG (Comptroller and Auditor General) of India is established under which Articles of the Constitution?

Q3. Consider the following statements: 1. In the Fifteenth Finance Commission's horizontal devolution formula, income distance carried a 45 per cent weight. 2. Population and area each carried a 15 per cent weight. 3. Demographic performance carried a 12.5 per cent weight. 4. Tax and fiscal efforts carried a higher weight than forest and ecology. Which of the statements given above are correct?

Q4. Consider the following statements: 1. The Fifteenth Finance Commission recommended 42% of the divisible pool to States. 2. The Fourteenth Finance Commission raised States' share in the net proceeds of Union tax revenues to 42%. 3. The Thirteenth Finance Commission fixed States' share at 32% for 1 April 2010 to 31 March 2015. Which of the statements given above are correct?

Q5. Consider the following statements: 1. The Fifteenth Finance Commission covered FY 2021-22 to FY 2025-26. 2. It recommended 41% devolution of the net proceeds of Union taxes to States for 2021-26. 3. The reduction from 42% to 41% was linked to the creation of the Union Territories of Jammu and Kashmir and Ladakh. 4. The Fourteenth Finance Commission had recommended 32% devolution to States. Which of the statements given above are correct?