Indian Polity · Polity
Consider the following statements: Statement I: An increase in the Union Government's reliance on cesses and surcharges can reduce the effective share of States in the total central tax collections, even if the Finance Commission recommends an unchanged vertical devolution percentage. Statement II: Cesses and surcharges levied by the Union Government are excluded from the divisible pool of central taxes under the constitutional scheme of tax devolution. Which one of the following is correct in respect of the above statements?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Both Statement I and Statement II are correct and Statement II is the correct explanation for Statement I✓
- 2Both Statement I and Statement II are correct and Statement II is not the correct explanation for Statement I
- 3Statement I is correct but Statement II is incorrect
- 4Statement I is incorrect but Statement II is correct
Correct answer
Both Statement I and Statement II are correct and Statement II is the correct explanation for Statement I
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