Part XII: Finance, Property, Contracts and Suits

Article 273: Grants in Lieu of Export Duty on Jute and Jute Products

Original Article:

(1) There shall be charged on the Consolidated Fund of India in each year as grants-in-aid of the revenues of the States of Assam, Bihar, Odisha, and West Bengal, in lieu of assignment of any share of the net proceeds in each year of export duty on jute and jute products to those States, such sums as may be prescribed.

(2) The sums so prescribed shall continue to be charged on the Consolidated Fund of India so long as any export duty on jute or jute products continues to be levied by the Government of India or until the expiration of ten years from the commencement of this Constitution, whichever is earlier.

(3) In this article, the expression "prescribed" has the same meaning as in Article 270.

Explanations:

Article 273 provides financial grants to certain States as compensation for the centralization of export duties on jute and jute products. This provision ensures that States with significant jute industries receive fiscal support to sustain their economies.

Clause-by-Clause Explanation:

Clause (1): Grants-in-Aid from the Consolidated Fund

This clause mandates annual grants to Assam, Bihar, Odisha, and West Bengal from the Consolidated Fund of India. These grants compensate for the States’ loss of direct revenue from export duties on jute products.

Real-Life Example: West Bengal, a major jute-producing state, relied on these grants to support its jute industry and rural economy during the first decade post-independence.

Clause (2): Duration of Grants

Grants are provided only as long as export duties on jute are levied or for a maximum of ten years from the commencement of the Constitution.

Real-Life Example: The gradual reduction in dependency on export duties marked the economic diversification of States like Assam and Odisha.

Clause (3): Definition of "Prescribed"

This clause aligns the term "prescribed" with its usage in Article 270, ensuring consistency in financial terminology across related provisions.

Historical Significance:

Article 273 reflects the transitional nature of India’s fiscal policies post-independence, addressing regional disparities by providing targeted financial support to States dependent on jute exports.

Real-Life Examples:

1. These grants helped States like Assam and Bihar invest in alternative industries and reduce dependency on jute exports over time.

2. The financial support contributed to infrastructure development in rural jute-producing regions.

Legislative History:

Article 273, introduced during the drafting of the Constitution, aimed to balance fiscal centralization with regional economic support, reflecting India’s commitment to cooperative federalism.

Debates and Deliberations:

Dr. B.R. Ambedkar emphasized the importance of compensating States for revenue losses due to the centralization of export duties, ensuring their economic stability.

Members like Shri Rohini Kumar Chaudhuri highlighted the reliance of rural economies on jute production, advocating for sustained financial support.