Statutory grants to states by the Union government, under Article 275 of the Constitution, are primarily recommended by which body?
- AOption (a)
National Development Council
- BOption (b)
Finance Commission
- COption (c)
Ministry of Finance
- DOption (d)
NITI Aayog
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Correct answer
Finance Commission
Why this answer is correct
The correct answer is Finance Commission.
Key Points
- The Finance Commission is a constitutional body established under Article 280 of the Indian Constitution to recommend financial relations between the Union and the States.
- Under Article 275, the Finance Commission recommends statutory grants to states to ensure balanced regional development and mitigate disparities.
- These grants are given to states that require financial assistance to meet specific needs, such as social welfare, infrastructure development, or education.
- The Finance Commission submits its recommendations to the President, which are then tabled in Parliament for implementation.
- The grants are unconditional and are intended to supplement the resources of the states to enable them to perform their constitutional responsibilities.
Additional Information
- Finance Commission:
- Constituted every five years or earlier as deemed necessary by the President.
- Composed of a Chairperson and four other members with expertise in public finance and governance.
- The 15th Finance Commission, chaired by N.K. Singh, submitted its report for 2021-26.
- Article 275:
- Empowers Parliament to make grants-in-aid to states, as recommended by the Finance Commission.
- These grants aim to promote the welfare of Scheduled Tribes and develop their areas.
- Role of the Ministry of Finance:
- Although the Finance Commission makes recommendations, the Ministry of Finance oversees the disbursement of grants to states.
- It ensures that funds are allocated as per constitutional provisions and Commission recommendations.
- Difference from NITI Aayog:
- NITI Aayog focuses on policy formulation and cooperative federalism, while the Finance Commission deals with financial resource allocation.
- NITI Aayog does not have a constitutional mandate to recommend statutory grants.