Post Devolution Revenue Deficit (PDRD) Grant

February 7, 2022

The Central Government recently released 9,871 crores of rupees as Post Devolution Revenue Deficit (PDRD) grant. The grant was provided to 17 states. The grant was released by the finance ministry.

About PDRD Grant

The Post Devolution Revenue Deficit grant is provided to the state governments. The grant is provided under Article 275 of the constitution. The grants are released based on the recommendations made by the fifteenth finance commission.

What did the 15^th finance commission recommend?

The commission recommended to provided Rs 1,18,452 crores to 17 states in 2021-22. So far, 1,08,581 crores of rupees has been released. The 17 states to receive the grant were decided by the commission. The states were decided based on the gap between revenue and expenditure of the states.

Which 17 states received the grant?

West Bengal, Uttarakhand, Tripura, Tamil Nadu, Sikkim, Rajasthan, Punjab, Nagaland, Mizoram, Maghalaya, Manipur, Kerala, Karnataka, Himachal Pradesh, Haryana, Assam, Andhra Pradesh.

What does Article 275 say?

The parliament shall provide grants – in – aid to states. These grants are paid out from the consolidated fund of India. The central government has all rights to fix different amounts for different states.

Purpose of the grant

To help the state governments meet the expense of the schemes, promote welfare of the scheduled tribes and increase the administration of scheduled areas. These grants aim to correct inter – state disparities. Also, it aims to coordinate expansion of welfare schemes of the state.

Largest beneficiaries

The largest beneficiaries of the grant are Kerala, Himachal Pradesh, Punjab, Assam, Andhra Pradesh, Uttarakhand and West Bengal. The 15^th finance commission recommended Rs 15,323 crores to Kerala, Rs 11,431 crores to HP, Rs 7,659 crores to Punjab, Rs 7,579 crores to Assam, Rs 5,897 crores to Andhra Pradesh, Rs 5,076 crores to Uttarakhand and Rs 5,013 crores to West Bengal. 15% weightage was given to population of the states while fixing their share.

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