Q. With reference to different types of grants given to the states, which of the following statement is correct?
Exp) Option c is the correct answer answer.
Constitution provides for grants-in-aid to the states from the Central resources. There are two types of grants-in-aid, viz, statutory grants and discretionary grants.
Option a is incorrect: Article 275 empowers Parliament to make grants (known as statutory grants) to the states which are in need of financial assistance and not to every state.
Option b is incorrect: Article 282 empowers both the Centre and the states to make any grants (known as discretionary grants) for any public purpose, even if it is not within their respective legislative competence.
Option c is correct: Article 275 empowers Parliament to make grants to the states which are in need of financial assistance and not to every state. The statutory grants under Article 275 (both general and specifiare given to the states on the recommendation of the Finance Commission.
Option d is incorrect: Excess Grant (not Discretionary Grant) is granted when money has been spent on any service during a financial year in excess of the amount granted for that service in the budget for that year. Before the demands for excess grants are submitted to the Lok Sabha for voting, they must be approved by the Public Accounts Committee of Parliament.
| Important Tips What is the Post Devolution Revenue Deficit (PDRD)? • The Centre provides the PDRD Grant to the States under Article 275 of the Indian Constitution. • Article 275 provides for the payment of the sums as Parliament may by law provide as grants-in aid to the States in need of assistance. • The grants are paid out of the Consolidated Fund of India in each year, and different sums may be fixed for different States. |
