The correct answer is (c) 30.5 percent.
The 12th Finance Commission was constituted by the President of India on 29 December 2007. The Commission submitted its report on 15 December 2009. The Commission recommended that the extent of money transfer to the States out of sharable pool of Tax Collection should be fixed at 30.5 percent.
The Commission made this recommendation after taking into account a number of factors, including the need to ensure fiscal stability of the States, the need to promote balanced regional development, and the need to provide adequate resources to the States to meet their developmental needs.
The Commission’s recommendation was accepted by the Government of India and the States. The 14th Finance Commission has also recommended the same percentage of devolution to the States.
The following are the options for the question:
(a) 29.0 percent: This option is incorrect. The 12th Finance Commission recommended that the extent of money transfer to the States out of sharable pool of Tax Collection should be fixed at 30.5 percent, not 29.0 percent.
(b) 29.5 percent: This option is incorrect. The 12th Finance Commission recommended that the extent of money transfer to the States out of sharable pool of Tax Collection should be fixed at 30.5 percent, not 29.5 percent.
(c) 30.5 percent: This option is correct. The 12th Finance Commission recommended that the extent of money transfer to the States out of sharable pool of Tax Collection should be fixed at 30.5 percent.
(d) 32.0 percent: This option is incorrect. The 12th Finance Commission recommended that the extent of money transfer to the States out of sharable pool of Tax Collection should be fixed at 30.5 percent, not 32.0 percent.