The fourth item, i.e., sector-specific grant is recommended as in the previous Finance Commissions is not a correct statement regarding the recommendation of the Fourteenth Finance Commission (headed by Prof. Y.V. Reddy) as the Commission has significantly departed from the previous Commission vis-à-vis the recommendation of the principles governing grants-in-aid to the States by the Centre. Grants to the States are divided into two parts – (i) grant to the duly constituted gram panchayats; and (ii) grant to the duly constituted municipal bodies.