Correct answer: (a) 1 only
Explanation
- 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.
- 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.
- 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.
- 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.
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