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Difficulty: HardFederal System, Centre-State Relations, and Emergency Provisions

With reference to the financial relations between the Union and the States under the Constitution of India, consider the following statements:

1. Statutory grants under Article 275 are given to specific States in need of assistance on the recommendation of the Finance Commission and are charged on the Consolidated Fund of India.
2. Discretionary grants under Article 282 allow both the Union and the States to make grants for any public purpose, even if that purpose is outside their legislative jurisdiction.
3. Unlike statutory grants under Article 275, discretionary grants under Article 282 are not charged on the Consolidated Fund of India and are subject to regular budgetary appropriations.

Which of the statements given above are correct?

  1. A
    1 and 2 only
  2. B
    2 and 3 only
  3. C
    1 and 3 only
  4. 1, 2 and 3Answer

Answer

Statements 1, 2, and 3 are all correct.
All three statements are constitutionally accurate. Article 275 provides for statutory grants recommended by the Finance Commission which are charged on the Consolidated Fund of India. Article 282 grants are discretionary transfers that can be made by the Centre or States for any public purpose beyond strict legislative lists. Consequently, Article 282 grants require legislative voting and appropriation, unlike charged Article 275 grants.

Step-by-Step Solution

1
Evaluate Statement 1 regarding Article 275 statutory grants.
Article 275 empowers Parliament to make grants to States in need of financial assistance upon recommendations of the Finance Commission. These grants are charged directly upon the Consolidated Fund of India.
Constitutional mandate under Article 275 ensures non-votable statutory financial transfers.
2
Evaluate Statement 2 regarding Article 282 discretionary grants scope.
Article 282 provides that the Union or a State may make any grants for any public purpose, notwithstanding that the purpose is not one with respect to which Parliament or the State Legislature may make laws.
Article 282 serves as a spending power provision outside strict legislative domain constraints.
3
Evaluate Statement 3 regarding procedural distinction in funding source.
Grants under Article 275 are charged expenditures (non-votable), whereas grants under Article 282 are votable expenditures requiring legislative annual budget approval.
This procedural difference distinguishes statutory fiscal transfers from discretionary scheme allocations.

Key Concept

Constitutional Mechanisms of Centre-State Financial Relations (Articles 275 and 282)
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Topics

Federal System, Centre-State Relations, and Emergency Provisions

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