With reference to the Fourteenth Finance Commission, which of the following statements is/are correct?1.It has increased the share of States in the central divisible pool from 32 percent to 42 percent.2.It has made recommendations concerning sector-specific grants.Select the correct answer using the code given below

1. A

   1 only

   (a) 1 only. The Fourteenth Finance Commission raised States’ share in the divisible pool from 32 per cent to 42 per cent and preferred that untied devolution over sector-specific grants. Statement 1 is therefore correct and 2 is not; that combination is the official key.

2. B

   2 only

   (b) 2 only. Sector-specific grants were a feature of earlier Commissions, not a headline 14th FC recommendation. Treating 2 as the sole truth drops the actual 42 per cent award and is not the key.

3. C

   Both 1 and 2

   (c) Both 1 and 2. Statement 1 is right, but 2 is not: the 14th FC cut back tied, sector-wise grants so that States would receive a larger untied share. Both cannot be correct.

4. D

   Neither 1 nor 2

   (d) Neither 1 nor 2. Statement 1 is a defining 14th FC fact. Rejecting both statements is therefore wrong.

Summary. Official key is (a) 1 only. The 14th Finance Commission lifted vertical devolution from 32 per cent to 42 per cent of the divisible pool. It preferred this large untied transfer over a thick menu of sector-specific grants. Statement 2 therefore fails. Only statement 1 is correct on this paper.