Examine the principles used by the fifteenth Finance Commission for the horizontal distribution of funds and for the distribution of grants-in-aid. 10 marks

Mentor’s comment-
  • https://indianexpress.com/article/opinion/columns/finance-commission-grant-kc-neogy-covid-crisis-7191633/
  • In the intro, mention the functions of Finance Commission as envisaged in the Constitution.
  • In the body, mention the principle governing the horizontal distribution such as expenditure needs, equity and performance with the introduction of efficiency criteria of tax and fiscal efforts and by assigning 12.5 per cent weight to demographic performance. The principles for grants-in-aid are  (a) revenue deficit grants, (b) grants for local governments, (c) grants for disaster management, (d) sector-specific grants and (e) state-specific grants.
  • Conclude by mentioning that the Finance Commission rose to the challenge by dealing with the demands placed on it in difficult times.
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3 years ago

please review



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