The Fourteenth Finance Commission (FFC) used the following criteria and weights for horizontal distribution of tax proceeds among states: Income Distance (50%), Population (2011) (27.5%), Demographic Change (17.5%), Area (15%), and Forest Cover (7.5%). Arranging the parameters given in the question (Income distance, Population, Demographic changes, Area) in descending order of their weights: Income Distance (50%) > Population (15%). This corresponds to the order 1-2-3-4.
The Fourteenth Finance Commission assigned different weights to the following parameters for distribution of tax proceeds to the States : 1. Income distance 2. Population 3. Demographic changes 4. Area Arrange the aforesaid parameters in descending order in terms of their weights.
Asked in UPSC CDS 2 2018 · Topic: The Finance Commission (Principles governing recommendations for distribution)
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