Which of the given options best describes the truthfulness of the following statements? Statement-1: It is the duty of the Commission to make recommendations to the President as to the distribution between the Union and the States of the net proceeds of taxes which are to be, or may be, divided between them and the allocation between the States of the respective shares of such proceeds. Statement-2: It is the duty of the Commission to make recommendations to the President as to the principles which should govern the grants-in-aid of the revenues of the States out of the Consolidated Fund of India.
Both statement-1 and statement-2 are correct
The correct answer is option 1. Both statement-1 and statement-2 are correct. The Finance Commission of India has the responsibility to make recommendations regarding the distribution of tax revenues between the Union and States (statement-1) and the principles governing the grants-in-aid to the States (statement-2). Both of these tasks are key functions of the Finance Commission as per the Indian Constitution.
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Important Questions from Fiscal Policy
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2. Fiscal deficit as a percent of GDP of India has steadily increased in the last decade.
Which of the statements given above is/are correct?
Which of the following organizations brings out the publication known as ‘World Economic Outlook’?
Which one of the following statements appropriately describes the "fiscal stimulus"?
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