Indian Polity · Polity
Which of the following statements accurately describes the mechanism of financial devolution concerning Vertical and Horizontal Distribution of resources in local governance?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Vertical distribution refers to the allocation of funds among different local bodies within the state, while horizontal distribution refers to the sharing of financial resources between the central and state governments.
- 2Vertical distribution involves the transfer of administrative powers to local units, whereas horizontal distribution relates to the generation of financial resources through local taxation.
- 3Vertical distribution refers to the allocation of funds between the state government and local bodies, while horizontal distribution concerns the sharing of funds among different local bodies at the same level.✓
- 4Vertical distribution assigns the taxes collected by local bodies to the state government, while horizontal distribution distributes grants directly from the Consolidated Fund of India to municipalities.
Correct answer
Vertical distribution refers to the allocation of funds between the state government and local bodies, while horizontal distribution concerns the sharing of funds among different local bodies at the same level.
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