Which one of the following criteria got the highest weight for determination of shares of States in the formula given by the 14th Finance Commission?

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Q: 84 (CDS-II/2017)

Which one of the following criteria got the highest weight for determination of shares of States in the formula given by the 14th Finance Commission?

question_subject: 

Economics

question_exam: 

CDS-II

stats: 

0,8,27,19,8,5,3

keywords: 

{'14th finance commission': [0, 0, 0, 2], 'criteria': [0, 0, 1, 4], 'shares': [0, 3, 3, 6], 'states': [1, 0, 0, 1], 'highest weight': [0, 0, 0, 2], 'formula': [1, 0, 0, 2], 'determination': [1, 0, 0, 3], 'income distance': [0, 0, 0, 2]}

The correct answer is option 2: Income distance.

The 14th Finance Commission uses a formula to determine the shares of states. This formula takes into account several criteria to allocate funds to each state. Among these criteria, income distance carries the highest weight.

Income distance refers to the difference in per capita income between states. States with lower per capita income are given a higher weightage to ensure that they receive a larger share of funds. This criterion aims to reduce regional imbalances and promote equality among states.

It is important to note that while population, area, and tax effort are also considered in the formula, income distance is assigned the highest weight. This emphasizes the commission`s focus on addressing economic disparities among states and promoting inclusive growth.

Therefore, option 2: Income distance is the correct answer.