RAS question
Article 275 provides for:
Correct answer: (C) Statutory grants-in-aid from Consolidated Fund to States as per Finance Commission.
Article 275 provides for statutory grants-in-aid from the Consolidated Fund of India to States that Parliament determines need assistance.
Explanation
Article 275 is about grants from the Union to certain States, not ordinary tax sharing or loans. The official Constitution text says that sums provided by Parliament by law are charged on the Consolidated Fund of India each year as grants-in-aid of the revenues of States that Parliament determines to be in need of assistance, and that different sums may be fixed for different States. This matches the exam explanation: these are statutory grants-in-aid, routed from the Consolidated Fund of India, with the Finance Commission framework guiding the principles for such grants. The key test clue is the phrase grants-in-aid, because Article 275 creates a constitutional grant mechanism rather than a general fiscal discretion of the Union executive.
Why the other options are wrong
- (A) Tax sharing is wrong because Article 275 speaks of grants-in-aid charged on the Consolidated Fund of India, not the division of tax proceeds.
- (B) Discretionary grants by the Centre is wrong because Article 275 refers to sums that Parliament may provide by law for States needing assistance.
- (D) Loans to States is wrong because Article 275 provides grants-in-aid of State revenues, not repayable borrowing by States.
Concept
This tests Centre-State financial relations, especially the distinction between tax devolution, statutory grants and loans. RAS repeats this area because Finance Commission-linked grants are a core part of Indian fiscal federalism.