Consider the following statements regarding Statutory Grants given by the Centre to the State 1 The ...........

Indian Polity Centre - State Relations

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Consider the following statements regarding Statutory Grants given by the Centre to the State:

1. The sum is charged on the Consolidated Fund of India.

2. In a year, equal fund is fixed for all the states.

3. Statutory grants are given to the states on the recommendation of NITI Aayog.

Which of the above statements are NOT correct?

1 only

2&3 only

1&3 only

None

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Explanation:

Grants-in-Aid to the States
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-aid, viz, statutory grants and discretionary grants:
Statutory Grants
Article 275 empowers the Parliament to make grants to the states which are in need of financial assistance and not to every state. Also, different sums may be fixed for different states. These sums are charged on the Consolidated Fund of India every year. Apart from this general provision, the Constitution also provides for specific grants for promoting the welfare of the scheduled tribes in a state or for raising the level of administration of the scheduled areas in a state including the State of Assam. The statutory grants under Article 275 (both general and specific) are given to the states on the recommendation of the Finance Commission.

Discretionary grants:

Under article 282, both centre and states are able to make any grants for public purpose even if they are not within their legislative competence. Since such grants are discretionary, there are no obligations to make such grants.