CURRENT AFFAIRS

Detailed explanation-1: -Tied Grants:- FC-XV has recommended a total of Rs. 1, 42, 083 crore as Tied grant as per State-wise & Year-wise details given in Annexure-II out of which (i) Rs. 71, 042 crore (30 % of the total RLBS tied grant) shall be earmarked for ‘Drinking water, rainwater harvesting and water recycling’ and (ii) Rs.

Detailed explanation-2: -Devolution of taxes to states: The share of states in the centre’s taxes is recommended to be decreased from 42% during the 2015-20 period to 41% for 2020-21. The 1% decrease is to provide for the newly formed union territories of Jammu and Kashmir, and Ladakh from the resources of the central government.

Detailed explanation-3: -The Commission observed that the recommended path for fiscal deficit for the centre and states will result in a reduction of total liabilities of: (i) the centre from 62.9% of GDP in 2020-21 to 56.6% in 2025-26, and (ii) the states on aggregate from 33.1% of GDP in 2020-21 to 32.5% by 2025-26.

Detailed explanation-4: -The 15th Finance Commission in its report for the period from 2021-22 to 2025-26 has divided the Urban Local Bodies into two categories: (a) Million-Plus urban agglomerations/cities (excluding Delhi and Srinagar), and (b) all other cities and towns with less than one million population (Non-Million Plus cities).

Detailed explanation-5: -For states, the FC had recommended a fiscal deficit limit of 4% for FY22, 3.5% in FY23 and 3% during FY24-26. If a state is unable to fully utilise the sanctioned borrowing limit during the first four years (FY22-FY25), it could avail the unutilised borrowing amount in subsequent years (within FY22-FY26).