Q. With reference to “Discretionary grants”, consider the following statements:
1. It is called discretionary grants because there is no constitutional obligation for the centre to give these grants to states.
2. States can make these grants only for those public purposes which are within their legislative jurisdictions.
3. Centre allots these grants to states based only on the recommendation of the Finance commission.
How many of the above given statements are correct?
Exp) Option a is the correct answer
Besides sharing of taxes between the Centre and the states, the Constitution provides for grants-in-aid to the states from the Central resources. There are two types of grants-in-aidstatutory grants and discretionary grants.
Statement 1 is correct: Discretionary grants are called so because there is no constitutional obligation for the centre to give these grants to states and matters lie within the centre’s discretion. These grants are given to states to help states to fulfil their developmental plans and influence states to implement the national plan.
Statement 2 is incorrect: Article 282 empowers both the Centre and the states to make any grants for any public purpose, even if it is not within their respective legislative jurisdictions.
Statement 3 is incorrect: Centre does not allot these grants to states based on the recommendation of the Finance commission. In contrast statutory grants (Article 275) are allotted to states by the centre based on the recommendation of the Finance commission.
| Important Tips For the horizontal devolution, the 15th Finance Commission has suggested the following weights: • Income distance – 45% • Area – 15% • Population – 15% • Demographic Performance – 12.5% • Forest and Ecology – 10% • Tax and Fiscal Efforts – 2.5% |
