CLAT GurukulSamudraManthan
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Topic 002 · Polity, Constitution & Governance

16th Finance Commission report 2026-31

10 MCQs · tap an option to check it · All answers

Revise the 12 points first Book 1 RATNA
  1. Core Trigger: The Sixteenth Finance Commission's report for 2026-31 was tabled on 1 February 2026.
  2. Vertical Share: The report retained the States' share of central taxes at 41 per cent.
  3. Current Head: Dr Arvind Panagariya chaired the Sixteenth Finance Commission.
  4. New Criterion: A new contribution-to-GDP criterion carries 10 per cent weight in dividing the States' share.
  5. Formula Changes: Tax effort was dropped as a criterion, and population weight rose to 17.5 per cent.
  6. Stakeholders: The Union and the States share the divisible pool; the Fifteenth Commission also fixed the share at 41 per cent.
  7. India Link: The formula decides fiscal transfers to States for the five years from 2026-27, shaping their budgets.
  8. Venue: The report was laid before Parliament at New Delhi.
  9. Founded: The first Finance Commission was constituted in 1951 under K. C. Neogy.
  10. Governing Act: The Finance Commission (Miscellaneous Provisions) Act, 1951 governs members' qualifications and the Commission's powers.
  11. Articles: Article 280(1) requires a Commission every fifth year or earlier; Article 281 requires its report and an action-taken memorandum to be laid before Parliament.
  12. Doctrine: Vertical devolution is the Union-State split of taxes; horizontal devolution is the division of the States' share among States.
Question 1 of 10

On which date was the Sixteenth Finance Commission's report for 2026-31 tabled?

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Answer: (C) 1 February 2026

Core Trigger: The Sixteenth Finance Commission's report for 2026-31 was tabled on 1 February 2026.From Book 1 RATNA, topic 002, point 1

Question 2 of 10

What share of central taxes did the report retain for the States?

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Answer: (C) 41 per cent

Vertical Share: The report retained the States' share of central taxes at 41 per cent.From Book 1 RATNA, topic 002, point 2

Question 3 of 10

Who chaired the Sixteenth Finance Commission?

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Answer: (B) Dr Arvind Panagariya

Current Head: Dr Arvind Panagariya chaired the Sixteenth Finance Commission.From Book 1 RATNA, topic 002, point 3

Question 4 of 10

What weight does the new contribution-to-GDP criterion carry in dividing the States' share?

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Answer: (B) 10 per cent

New Criterion: A new contribution-to-GDP criterion carries 10 per cent weight in dividing the States' share.From Book 1 RATNA, topic 002, point 4

Question 5 of 10

Consider the statements: 1. Tax effort was dropped as a criterion. 2. Population weight rose to 17.5 per cent. Which is/are correct?

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Answer: (C) Both 1 and 2

Formula Changes: Tax effort was dropped as a criterion, and population weight rose to 17.5 per cent.From Book 1 RATNA, topic 002, point 5

Question 6 of 10

For how many years from 2026-27 does the Commission's formula decide fiscal transfers to States?

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Answer: (A) Five years

India Link: The formula decides fiscal transfers to States for the five years from 2026-27, shaping their budgets.From Book 1 RATNA, topic 002, point 7

Question 7 of 10

At which city was the report laid before Parliament?

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Answer: (A) New Delhi

Venue: The report was laid before Parliament at New Delhi.From Book 1 RATNA, topic 002, point 8

Question 8 of 10

Who headed the first Finance Commission, constituted in 1951?

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Answer: (D) K. C. Neogy

Founded: The first Finance Commission was constituted in 1951 under K. C. Neogy.From Book 1 RATNA, topic 002, point 9

Question 9 of 10

Which Act governs the qualifications of Finance Commission members and its powers?

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Answer: (B) Finance Commission (Miscellaneous Provisions) Act, 1951

Governing Act: The Finance Commission (Miscellaneous Provisions) Act, 1951 governs members' qualifications and the Commission's powers.From Book 1 RATNA, topic 002, point 10

Question 10 of 10

Consider the statements: 1. Vertical devolution is the Union-State split of taxes. 2. Horizontal devolution is the division of the Union's share among Union Territories. Which is/are correct?

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Answer: (A) Only 1

Doctrine: Vertical devolution is the Union-State split of taxes; horizontal devolution is the division of the States' share among States.From Book 1 RATNA, topic 002, point 12

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