Q. Consider the following statements regarding various grants provided to states:
1. Statutory grants are made compulsorily for every state but discretionary grants are not.
2. Statutory grants are made by the Parliament, whereas discretionary grants are made by the Central government.
3. Specific grants needed for promoting the welfare of Scheduled Tribes in a state are considered as discretionary grants.
How many of the above statements are incorrect?
Exp) Option b is the correct answer.
Statement 1 is incorrect. Article 275 of Constitution of India provides for statutory grants to those states which are in need of financial assistance and not to every state. Moreover, different sums are charged for different states. Discretionary grants are the grants provided by the centre and states under Article 282 for any public purpose even if it is not in their legislative competence. The centre is under no obligation to give this grant to states, rather it is centres discretion to allocate this grant. Thus, both statutory and discretionary grants are not compulsorily given to all states.
Statement 2 is correct. Statutory grants are made by the Parliament on the recommendation of Finance Commission. While the Discretionary grants are made by the Centre as well as by the states on their discretion.
Statement 3 is incorrect. Specific grants needed for promoting the welfare of Scheduled tribes in a state are considered as statutory grants. Moreover, grants for raising the level of administration of the scheduled areas in a state including in the state of Assam is also considered in the category of statutory grants.
