If the Union's total revenue for the financial year is Rs. 25,00,000 crore and the latest Finance Commission recommends that 30% of this revenue should be allocated to the states, how much revenue (in crore rupees) will the states receive?
Answer
7,50,000 crore
The correct answer is 7,50,000 crore — Step 4: State the result as Rs. 7,50,000 crore. This is the amount the states receive.
Step-by-step solution
- Step 1: Identify the total Union revenue, which is Rs. 25,00,000 crore.
- Step 2: Convert the percentage allocated to the states into a decimal: 30% = 0.30.
- Step 3: Multiply the total revenue by the decimal to get the amount for the states: 25,00,000 × 0.30 = 7,50,000.
- Step 4: State the result as Rs. 7,50,000 crore. This is the amount the states receive.
Common mistake: Treating 30% as 30% of the state share instead of the total revenue
Concept tested: Revenue distribution under Finance Commission
Published · How this solution was prepared and checked
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