Which of the following statements with regard to recommendations of the 15th Finance Commission of India are correct?
I. It has recommended grants of ₹4,800 crores from the year 2022–23 to 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:
Explanation
Statement I is correct. The 15th Finance Commission recommended grants totaling ₹4,800 crore (i.e., ₹1,200 crore per year) from 2022–23 to 2025–26 to incentivize States to enhance educational outcomes.
Statement II is not correct. The Commission recommended that 41%, not 45%, of the net proceeds of Union taxes be shared with States, maintaining the level from its earlier interim report.
Statement III is correct. A performance-based incentive of ₹45,000 crore was recommended for States to implement agricultural reforms, such as amending land laws and promoting agricultural exports.
Statement IV is correct. The Commission reintroduced the ‘tax effort’ criterion to reward better fiscal performance by States. This was assigned a 2.5% weightage in the horizontal devolution formula.