UPSC Prelims Practice Questions — GOVERNMENT ACCEPTS 16TH FINANCE COMMISSION’S RECOMMENDATION TO RETAIN VERTICAL SHARE OF DEVOLUTION AT 41 PERCENT

Question 1

By how many percentage points did the 14th Finance Commission raise the states' vertical share of the divisible pool compared with the share recommended by the 13th Finance Commission?

Accepted Answer

10 percentage points

Answer

8 percentage points

Answer

9 percentage points

Answer

12 percentage points

Question 2

The present vertical devolution share of 41% of the divisible pool, retained by the 16th Finance Commission, was first fixed at that exact level by which Finance Commission?

Accepted Answer

15th Finance Commission under Shri N.K. Singh

Answer

14th Finance Commission under Dr. Y.V. Reddy

Answer

16th Finance Commission under Dr. Arvind Panagariya

Answer

13th Finance Commission under Dr. Vijay Kelkar

Question 3

As per the constitutional scheme, the Finance Commission consists of a Chairman and how many other members?

Accepted Answer

Four members

Answer

Three members

Answer

Five members

Answer

Six members

Question 4

The requirement to lay every recommendation of the Finance Commission before Parliament, together with an explanatory memorandum on the action taken, is provided under which Article of the Constitution?

Accepted Answer

Article 281

Answer

Article 280

Answer

Article 275

Answer

Article 270

Question 5

At the time of its constitution, exactly how many full-time members (excluding the Chairman) were appointed to the 16th Finance Commission?

Accepted Answer

Three

Answer

Two

Answer

Four

Answer

Five

Question 6

With reference to the 16th Finance Commission, consider the following statements:
1. It was constituted in December 2024.
2. Its Chairman, Dr. Arvind Panagariya, is a former Vice-Chairman of NITI Aayog.
3. Its award period, 2026-27 to 2030-31, immediately follows the 15th Finance Commission's period of 2021-22 to 2025-26.
Which of the statements given above is/are correct?

Accepted Answer

2 and 3 only

Answer

1 and 2 only

Answer

1 and 3 only

Answer

1, 2 and 3

Question 7

The ₹1.4 lakh crore earmarked as Finance Commission Grants to the States, covering local body and disaster management grants, was provided as part of which of the following?

Accepted Answer

Union Budget 2026-27

Answer

Union Budget 2025-26

Answer

Interim Budget 2024-25

Answer

Union Budget 2027-28

Question 8

In the horizontal devolution formula adopted by the 16th Finance Commission, which single criterion carries the highest weight?

Accepted Answer

Income Distance

Answer

Population (2011 Census)

Answer

Area

Answer

Contribution to GDP

Question 9

In the context of fiscal federalism, which one of the following best describes the Finance Commission, as distinct from the GST Council?

Accepted Answer

A body under Article 280 that recommends the distribution of the net proceeds of taxes between the Union and the States and their allocation among States

Answer

A body under Article 279A that recommends rates, exemptions and the base of the Goods and Services Tax

Answer

A body chaired by the Union Finance Minister that administers the Consolidated Fund of India

Answer

A statutory body that determines the borrowing limits of State governments

Question 10

Within the Ministry of Finance, the Finance Commission Division that operationalises devolution from the divisible pool and the disbursement of Finance Commission grants functions under which Department?

Accepted Answer

Department of Expenditure

Answer

Department of Revenue

Answer

Department of Economic Affairs

Answer

Department of Financial Services

UPSC Prelims Practice Questions — GOVERNMENT ACCEPTS 16TH FINANCE COMMISSION’S RECOMMENDATION TO RETAIN VERTICAL SHARE OF DEVOLUTION AT 41 PERCENT

Q1. By how many percentage points did the 14th Finance Commission raise the states' vertical share of the divisible pool compared with the share recommended by the 13th Finance Commission?

Q2. The present vertical devolution share of 41% of the divisible pool, retained by the 16th Finance Commission, was first fixed at that exact level by which Finance Commission?

Q3. As per the constitutional scheme, the Finance Commission consists of a Chairman and how many other members?

Q4. The requirement to lay every recommendation of the Finance Commission before Parliament, together with an explanatory memorandum on the action taken, is provided under which Article of the Constitution?

Q5. At the time of its constitution, exactly how many full-time members (excluding the Chairman) were appointed to the 16th Finance Commission?

Q7. The ₹1.4 lakh crore earmarked as Finance Commission Grants to the States, covering local body and disaster management grants, was provided as part of which of the following?

Q8. In the horizontal devolution formula adopted by the 16th Finance Commission, which single criterion carries the highest weight?

Q9. In the context of fiscal federalism, which one of the following best describes the Finance Commission, as distinct from the GST Council?

Q10. Within the Ministry of Finance, the Finance Commission Division that operationalises devolution from the divisible pool and the disbursement of Finance Commission grants functions under which Department?