Grants-in-aid
Also called: Article 275 · Topic: Federalism and Centre-State Relations · NCERT: Class 11, Ch 7 "Federalism"
Meaning
Grants-in-aid are grants under Article 275. Parliament gives them from the Consolidated Fund of India, the Union's main account, to states that need help. They are fixed by law, so they are also called statutory grants. The amounts follow the advice of the Finance Commission, the body that advises on sharing money between the Union and states. Article 275 also allows special grants for the welfare of Scheduled Tribes and for better administration of scheduled areas.
Example
A state with weak revenues gets a yearly grant under Article 275 on the Finance Commission's advice, to fill the gap between its income and its spending. A state with tribal areas may also get a specific grant for tribal welfare.
Don't confuse with
- Discretionary grants (Art. 282): can be given for any public purpose at the giver's choice, without needing Finance Commission advice. They are often used for centrally sponsored schemes.
Related concepts
- Vertical fiscal imbalance
- Discretionary grants
- Gadgil formula
- 101st Constitutional Amendment Act 2016
- Concurrent taxing power for GST