Question

Consider the following statements regarding Grants-in-Aid to the States:
1. The provision of Statutory Grants to states is made under Article 282 of constitution.
2. The provision of Discretionary Grants to states is made under Article 275 of constitution.
3. The bases of Statutory Grants are recommendations of finance commission.
Which of the above statement(s) is/are correct?

• A. Only 1 and 2
• B. Only 3
• C. Only 2
• D. All of the above

Answer 1

The correct option is B Only 3

1. Article 275 makes provisions for statutory grants to needy states (not every state). These are charged on Consolidated Fund of India. Such grants also include specific grants for promoting the welfare of the scheduled tribes in a state or for raising the level of administration of the scheduled areas in a state including the State of Assam. The bases of these grants are recommendations of finance commission.
2. Under article 282, both centre and states are able to make any grants for public purpose even if they are not within their legislative competence. Since such grants are discretionary, there are no obligations to make such grants. During the planning commission era, these discretionary grants were in fact bigger than statutory grants and that is why planning commission had assumed very important role.