UPPSC 2025 Prelims GS Paper-I · Question 123 of 150

Correct — A, A-3, B-1, C-4, D-2: Eleventh — Prof. A. M. Khusro; Twelfth — Dr C. Rangarajan; Thirteenth — Dr Vijay L. Kelkar; Fourteenth — Dr Y. V. Reddy. Taking the four Commissions in turn. The Eleventh Finance Commission, whose award covered 2000-05, was chaired by the economist Professor A. M. Khusro; its award was the first to work with the single divisible pool of all Union taxes created by the Eightieth Constitutional Amendment, 2000, and it set the States' share at 29.5 per cent. The Twelfth, for 2005-10, was chaired by Dr C. Rangarajan, a former Governor of the Reserve Bank of India; it is remembered for the Debt Consolidation and Relief Facility offered to States that enacted fiscal responsibility legislation, and for telling States to borrow directly from the market rather than through the Centre. The Thirteenth, for 2010-15, was chaired by Dr Vijay L. Kelkar, a former Union Finance Secretary; it drafted a model Goods and Services Tax with a compensation package tied to adherence to that design, and recommended devolving a share of central taxes to local bodies as grants. The Fourteenth, for 2015-20, was chaired by Dr Y. V. Reddy, also a former RBI Governor; it made the single largest change in the history of Indian fiscal federalism by raising the States' share of the divisible pool from 32 to 42 per cent. Only option (a) produces that set. The paper's trap is that two of the four chairmen — Rangarajan and Reddy — were Governors of the Reserve Bank, so the names sit together in memory and the wrong options simply rotate them. Anchoring on Khusro is the cheapest route: he is the odd one out, an academic economist rather than a central banker or a finance secretary, and he chaired the Eleventh. Fixing A-3 alone eliminates options (c) and (d) at once.

• (b)A-3, B-2, C-1, D-4 — The hardest of the three to reject, because it opens correctly with A-3, Khusro at the Eleventh Commission — and then rotates the remaining three names by one place. It puts Y. V. Reddy at the Twelfth (he chaired the Fourteenth), C. Rangarajan at the Thirteenth (he chaired the Twelfth) and Vijay Kelkar at the Fourteenth (he chaired the Thirteenth). Every pair after the first is wrong.
• (c)A-2, B-3, C-4, D-1 — Gets only the Thirteenth right. It swaps the first two — Y. V. Reddy at the Eleventh and Khusro at the Twelfth, whereas Khusro chaired the Eleventh and Reddy the Fourteenth — and then hands the Fourteenth to Rangarajan, who chaired the Twelfth.
• (d)A-1, B-3, C-2, D-4 — Every one of the four pairs is wrong. Rangarajan is placed at the Eleventh (he chaired the Twelfth), Khusro at the Twelfth (he chaired the Eleventh), Reddy at the Thirteenth (he chaired the Fourteenth) and Kelkar at the Fourteenth (he chaired the Thirteenth). It is the option produced by assuming the chairmen appear in List-II in the same order as the Commissions in List-I.

The Finance Commission is a constitutional body under Article 280. The President must constitute one every fifth year, or earlier if he considers it necessary, and it consists of a Chairman and four other members whose qualifications Parliament has prescribed by law. Its core task is to recommend how the net proceeds of shareable central taxes are divided between the Union and the States — vertical devolution — and how the States' portion is distributed among them — horizontal devolution; it also recommends the principles governing grants-in-aid to States out of the Consolidated Fund of India under Article 275, and, since the 73rd and 74th Amendments, measures to augment State funds to supplement the resources of panchayats and municipalities. The report goes to the President, who causes it to be laid before each House of Parliament with an explanatory memorandum on the action taken (Article 281). Its recommendations are advisory, not binding, though the devolution formula is in practice always accepted.

A four-by-four match-list is really four independent yes/no facts, but a candidate almost never needs all four. Scan the options for the item that the four codes disagree about most, and secure that one. Here the first pair does the work: two options assign the Eleventh Commission to Khusro and two do not, so recalling A-3 alone halves the field, and recalling B-1 finishes it. Choosing which anchor to memorise is also strategic. Rangarajan and Reddy are both former RBI Governors and both associated with the same decade of fiscal reform, so they are exactly the pair the examiner expects you to blur — which makes them poor anchors. Khusro and Kelkar are distinctive, and the Fourteenth Commission's 42 per cent is the single most quoted number in Indian fiscal federalism, which locks Reddy in place at the end.

• Eleventh Finance Commission (award period 2000-05) — Chairman Prof. A. M. Khusro; its award was the first to operate the single divisible pool of all Union taxes created by the Eightieth Constitutional Amendment, 2000, and it set the States' share at 29.5 per cent
• Twelfth (2005-10) — Chairman Dr C. Rangarajan, a former Governor of the Reserve Bank of India; it recommended the Debt Consolidation and Relief Facility for States that enacted fiscal responsibility legislation, and that States borrow directly from the market rather than through the Centre
• Thirteenth (2010-15) — Chairman Dr Vijay L. Kelkar, a former Union Finance Secretary; it designed a model Goods and Services Tax with a compensation package linked to adherence to that design, and recommended devolving a specified share of central taxes to local bodies as grants
• Fourteenth (2015-20) — Chairman Dr Y. V. Reddy, also a former RBI Governor; it raised the States' share of the divisible pool from 32 to 42 per cent and declined to recommend sector-specific grants
• The sequence continues with the Fifteenth Commission under Shri N. K. Singh (2021-26, States' share 41 per cent) and the Sixteenth under Dr Arvind Panagariya, constituted on 31 December 2023 for the award period 2026-31; the First Commission, in 1951, was chaired by Shri K. C. Neogy
• Article 280 requires a Commission every fifth year, made up of a Chairman and four other members; the report is submitted to the President and laid before each House of Parliament under Article 281, and its recommendations are advisory rather than binding

• Swapping C. Rangarajan and Y. V. Reddy because both were Governors of the Reserve Bank of India. Rangarajan chaired the Twelfth Commission, Reddy the Fourteenth
• Attaching A. M. Khusro to the Union Public Service Commission — a decoy UPSC used explicitly in 2007. He chaired the Eleventh Finance Commission
• Confusing the Commission's number with its award period. The Fourteenth Commission was constituted in 2013 and reported in 2014, but its award runs 2015-20; questions may quote either date

UPPSC likes the Finance Commission in two shapes — a match-list, as here and as in 2023 when it paired Article 280 with the Commission, and a single-fact question such as 2021's on the Chairman of the First Finance Commission. UPSC rarely asks who chaired which Commission head-on; it tests the substance of a particular award instead, as with the Thirteenth Commission's GST design in 2012 and the Fourteenth's 42 per cent in 2015, and once slipped Khusro's chairmanship into a not-correctly-matched item in 2007.

• practice — not a real PYQ

  Who among the following was the Chairman of the Fifteenth Finance Commission of India?

  • (a)Dr. Y. V. Reddy
  • (b)Dr. Vijay L. Kelkar
  • (c)Shri N. K. Singh
  • (d)Dr. Arvind Panagariya

  Answer(c) Shri N. K. Singh — he chaired the Fifteenth Commission, whose award covers 2021-26 and set the States' share of the divisible pool at 41 per cent. Dr Arvind Panagariya chairs the Sixteenth.

• practice — not a real PYQ

  The Sixteenth Finance Commission of India, constituted in December 2023, will make recommendations for which one of the following award periods?

  • (a)2021-26
  • (b)2024-29
  • (c)2025-30
  • (d)2026-31

  Answer(d) 2026-31 — the Sixteenth Commission was constituted on 31 December 2023 and its award period begins where the Fifteenth Commission's 2021-26 award ends.