Part XII: Finance, Property, Contracts and Suits

Article 275: Grants from the Union to certain States

Original Article:

(1) Such sums as Parliament may by law provide shall be charged on the Consolidated Fund of India in each year as grants-in-aid of the revenues of such States as Parliament may determine to be in need of assistance, and different sums may be fixed for different States.

Provided that there shall be paid out of the Consolidated Fund of India as grants-in-aid of the revenues of a State such capital and recurring sums as may be necessary to enable that State to meet the costs of such schemes of development as may be undertaken by the State with the approval of the Government of India for the purpose of promoting the welfare of the Scheduled Tribes in that State or raising the level of administration of the Scheduled Areas therein to that of the administration of the rest of the areas of that State.

(1A) On and from the formation of the autonomous State under article 244A—

• (i) any sums payable under clause (a) of the second proviso to clause (1) shall, if the autonomous State comprises all the tribal areas referred to therein, be paid to the autonomous State, and, if the autonomous State comprises only some of those tribal areas, be apportioned between the State of Assam and the autonomous State as the President may, by order, specify;
• (ii) there shall be paid out of the Consolidated Fund of India as grants-in-aid of the revenues of the autonomous State sums, capital and recurring, equivalent to the costs of such schemes of development as may be undertaken by the autonomous State with the approval of the Government of India for the purpose of raising the level of administration of that State to that of the administration of the rest of the State of Assam.

(2) Until provision is made by Parliament under clause (1), the powers conferred on Parliament under that clause shall be exercisable by the President by order and any order made by the President under this clause shall have effect subject to any provision so made by Parliament:

Provided that after a Finance Commission has been constituted no order shall be made under this clause by the President except after considering the recommendations of the Finance Commission.

Explanations:

Article 275 of the Indian Constitution establishes a financial support system whereby the Union Government provides grants to certain states to promote balanced economic development and ensure support for Scheduled Tribes and Scheduled Areas. This reflects India's commitment to equity across regions and uplifts marginalized communities.

Clause-by-Clause Explanation:

Clause (1): Parliament-Approved Grants-in-Aid

Empowers Parliament to allocate funds to states needing financial support to meet development goals and maintain public services. These grants help financially weaker states bridge budget gaps effectively.

Special Provisions for Scheduled Tribes and Scheduled Areas

The first proviso directs grants for schemes dedicated to the welfare of Scheduled Tribes or improving administration in Scheduled Areas. For example, states like Madhya Pradesh receive grants for healthcare, education, and infrastructure in tribal regions.

Clause (1A): Special Provisions for an Autonomous State

Introduced by the Constitution (Twenty-second Amendment) Act, 1969, this clause provides for financial allocations to autonomous states under Article 244A, ensuring regional autonomy while promoting inclusive growth.

Clause (2): Interim Authority of the President

Empowers the President to allocate funds until Parliament enacts relevant laws. Such orders must consider recommendations from the Finance Commission post-constitution.

Amendments:

The Constitution (Twenty-second Amendment) Act, 1969, introduced provisions for autonomous states. Additionally, the North-Eastern Areas (Reorganisation) Act, 1971, modified relevant clauses to address regional administrative reorganizations.

Legislative History:

Debated extensively in 1949, Article 275 evolved to address financial disparities among states, focusing on aiding regions with significant tribal populations. Subsequent amendments enhanced its relevance to modern governance needs.

Debates and Deliberations:

• Dr. B.R. Ambedkar emphasized equitable financial distribution to uplift underdeveloped regions.
• Syed Muhammad Sa'adulla highlighted Assam's financial challenges and advocated for focused grants for tribal areas.
• Thakkar Bapa urged measures for tribal welfare, emphasizing the need for funds to integrate these areas into national development.

References:

• Constituent Assembly Debates, 1949
• The Constitution (Twenty-second Amendment) Act, 1969
• North-Eastern Areas (Reorganisation) Act, 1971