The correct answer is option 1. Explanation & Key Takeaways: Seventh Finance Commission: • Finance Commission is a constitutional body for the purpose of allocation of certain revenue resources between the Union and the State Governments. • It was established under Article 280 of the Indian Constitution by the Indian President. • Seventh Finance Commission was appointed in the year 1977 under the chairmanship of J.M. Shelat. Recommendations: • The share of the states in the net proceeds should be raised to 85% excepting the share of the Union Territories which would be 2.19% of net proceeds. • The inter se distribution between the states should include a 10% contribution factor and the rest 90% would be on basis of population. The 10% allotment would be based on the State-wise net assessments. • Recommendations relating to the distribution of Union duties of excise, Additional duties of excise and Estate duty on property other than agricultural land fall in the second category. • Hence, statements (a) and (d) are correct and statements (b) and (c) is not correct.