Q57: GPSC Prelims 2026 GS: Previous Year Question with Answer

With reference to the 16th Finance Commission (FC) and its recommendations, consider the following statements: 1. The Finance Commission is a quasi-judicial body whose recommendations regarding the distribution of net proceeds of taxes are legally binding on the Union Government. 2. The Commission has introduced 'contribution to GDP' as a criterion for horizontal devolution, replacing the earlier tax and fiscal effort parameter. 3. Revenue deficit grants, sector-specific grants and state-specific grants have been continued to ensure the fiscal stability of weaker states. Which of the statements given above are incorrect?