Arrange the following factors in deceasing order of their weight in formula of Horizontal devolution...........

Economic Affairs Public Finance and Debt Management

Arrange the following factors in deceasing order of their weight in formula of Horizontal devolution of funds, as adopted by the Fifteenth Finance Commission (XVFC)

Forest & Ecology
Income Distance
Demographic Performance

Select the correct code.

1-2-3

2-3-1

3-1-2

2-1-3

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Explanation:

The horizontal devolution determines each state’s share in central taxes depending their status/performance in the weights assigned to following criterion:

On horizontal devolution, while XVFC agreed that the Census 2011 population data better represents the present need of States, to be fair to, as well as reward, the States which have done better on the demographic front, XVFC has assigned a 12.5 per cent weight to the demographic performance criterion.
Income distance is the distance of the state’s income from the state with the highest income.
XVFC has re-introduced tax effort criterion to reward fiscal performance.

Hence option 2nd is correct.