Correct Option (C)
Statements I, III, and IV are correct.
- Statement I: The 15th Finance Commission (XVFC) recommended grants totaling ₹4,800 crores for the period 2022-23 to 2025-26. These grants were specifically aimed at incentivizing States to enhance educational outcomes, with an annual allocation of ₹1,200 crores.
- Statement III: The XVFC proposed a performance-based incentive of ₹45,000 crores for all States. This allocation was intended to encourage States to implement agricultural reforms.
- Statement IV: The Commission reintroduced the 'tax effort' criterion. This criterion was designed to reward States demonstrating better fiscal performance and efficiency in tax collection.
Incorrect Options
Statement II is incorrect.
- Statement II: The 15th Finance Commission recommended that 41% of the divisible pool of Union taxes be shared with States for the period 2021-26. This was a reduction from the 42% recommended by the 14th Finance Commission, primarily due to the reorganization of the erstwhile state of Jammu & Kashmir into two Union Territories. Therefore, the assertion that 45% of the net proceeds are to be shared is factually inaccurate.
- Options 1, 2, and 4 include Statement II, which is incorrect. Consequently, these options are not the correct answer.