Indian Polity · Polity
With reference to the 16th Finance Commission (FC16) and its recommendations for the award period 2026-2031, which of the following statements is correct?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The Commission has decided to use the 1971 Census data as the primary basis for population-related weightage to protect the interests of states that successfully controlled population growth.
- 2For horizontal devolution, the 16th Finance Commission has introduced 'Contribution to GDP' as a new criterion with a 10% weightage to reward economically productive states.✓
- 3The Commission has recommended a significant increase in the vertical devolution of the divisible pool, raising the states' share from 41% to 45%.
- 4The 16th Finance Commission has introduced 'Tax and Fiscal Effort' as a new criterion for horizontal devolution to reward states with better fiscal discipline.
Correct answer
For horizontal devolution, the 16th Finance Commission has introduced 'Contribution to GDP' as a new criterion with a 10% weightage to reward economically productive states.
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