The Finance Commission, through the system of tax devolution and grants-in-aid, addresses the __:
1. Horizontal imbalance among states
2. Inter-state inequality
3. Intra-state inequality
Select the correct option from the codes given below:

Answer: [A] Only 1 & 2

From Finance Commission Report

Many States, in their submissions, suggested that intra-state inequality should be factored into the devolution formula or in determining grants, instead of only broad indicators such as per-capita income being considered. In this context, some of these States also highlighted the areas within the States as identified in Article 371 of the Constitution. We are of the view that intra-state inequality is within the policy jurisdiction of the States and provisioning of adequate resources through tax devolution should enable them to address intra-state inequalities in an effective manner.

This question is a part of GKToday's Integrated IAS General Studies Module