UPSC Prelims Practice Questions — Siddaramaiah says Budget denies fiscal justice to Karnataka

Q1. How many criteria has the 16th Finance Commission adopted for the horizontal devolution of central taxes among the States for the period 2026-31?

  • A. Four
  • B. Five
  • C. Six
  • D. Seven

Q2. Within the Government of India, which one of the following is the nodal department responsible for processing and operationalising the recommendations of the Finance Commission?

  • A. Department of Revenue, Ministry of Finance
  • B. Department of Economic Affairs, Ministry of Finance
  • C. Department of Expenditure, Ministry of Finance
  • D. Department of Financial Services, Ministry of Finance

Q3. With reference to the 16th Finance Commission's recommendations vis-à-vis those of the 15th Finance Commission, consider the following statements: 1. The share of States in the divisible pool of central taxes has been increased from 41% to 45%. 2. The 'Tax and Fiscal Efforts' criterion of the 15th Finance Commission has been replaced by 'Contribution to GDP'. 3. Karnataka's share in the divisible pool under the 16th Finance Commission is higher than its share under the 15th Finance Commission but lower than that under the 14th Finance Commission. Which of the statements given above is/are correct?

  1. The share of States in the divisible pool of central taxes has been increased from 41% to 45%.
  2. The 'Tax and Fiscal Efforts' criterion of the 15th Finance Commission has been replaced by 'Contribution to GDP'.
  3. Karnataka's share in the divisible pool under the 16th Finance Commission is higher than its share under the 15th Finance Commission but lower than that under the 14th Finance Commission.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1 and 3 only
  • D. 1, 2 and 3

Q4. Under which Article of the Constitution of India is the Finance Commission, whose 16th edition recently submitted its report for 2026-31, constituted by the President?

  • A. Article 263
  • B. Article 270
  • C. Article 280
  • D. Article 282

Q5. In the context of Centre–State financial relations in India, the term 'divisible pool' refers to which one of the following?

  • A. The gross tax revenue of the Union Government available for sharing with the States
  • B. The net proceeds of Union taxes after deducting cesses, surcharges and cost of collection, which is shareable with the States
  • C. The aggregate of the Consolidated Fund of India and the Public Account meant for inter-governmental transfers
  • D. The portion of Central tax revenue retained by the Union after devolving the States' share