14th Finance Commission Criteria for Horizontal Distribution
The Finance Commission recommends the distribution of divisible central taxes among states (horizontal distribution). The 14th Finance Commission, chaired by Dr. Y.V. Reddy, revised the criteria and their weightages significantly compared to previous commissions.
Criteria Weightages by 14th Finance Commission
The commission assigned weightages to several criteria for allocating funds. Among the options provided, the weightages were as follows:
| Criterion | Weightage (%) |
|---|---|
| Income Distance | 45% |
| Population | 17.5% |
| Area | 15% |
| Demographic Change | 10% |
| Forest & Ecology | 7.5% |
| Fiscal Discipline | 5% |
Identifying Least Weighted Criterion
Comparing the weightages assigned to the criteria mentioned in the options:
- Income distance: 45%
- Population: 17.5%
- Area: 15%
- Demographic change: 10%
The criterion of Demographic change received the least weightage (10%) among these options.
Therefore, the criterion that got the least weightage by the 14th Finance Commission while recommending horizontal distribution, from the given choices, is Demographic change.
Important Questions from Macroeconomics
- Real-factor demand-pull inflection can be caused by:
A. Increase in investment
B. Decrease in consumer demand
C. Decrease in imports given the exports
D. Decrease in exports given the imports
E. Decrease in government expenditure without change in tax revenue.
Choose the correct answer from the options given below : Match List-I with List-II:
List-I (Concepts) List-II (Given by) A. Paradox of thrift I. K. Boulding B. Water-Diamond paradox II. A.C. Pigou C. Wage employment paradox III. J.M. Keynes D. Macroeconomic paradox IV. Adam Smith
Choose the correct answer from the options given below:- Which of the followings are the effects of increase in government spending in IS-LM framework in a closed economy?
A. Increase in income by multiplier times government expenditure.
B. Shift in IS curve to the right leading to disequilibrium in money market at given level of interest rate.
C. Quantity of money demand will be higher.
D. Interest rate will decrease.
Ε. Private investment will increase leading to increase in aggregate demand.
Choose the correct answer from the options given below : - If the marginal propensity to consume is 0.8 and initial increase in tax revenues by the government is Rs. 100, then the impact on national income would be:
- Which of the followings are true about New Classical approach.
A. The main protagonist was R.E. Lucas Jr.
B. It is based on adaptive expectation.
C. It was developed during 1950s.
D. Complete wage and price flexibility.
Ε. Difference between actual and expected price is a random error.
Choose the most appropriate answer from the options given below :
