Types of Grants-in-aid in Indian Constitution
Apart from distribution of taxes between centre and states, the constitution provides for mainly two types of grants-in-aid viz. statutory grants and discretionary grants:
Statutory Grants
Article 275 makes provisions for statutory grants to needy states {not every state}. These are charged on Consolidated Fund of India. Such grants also include specific grants for promoting the welfare of the scheduled tribes in a state or for raising the level of administration of the scheduled areas in a state including the State of Assam. The bases of these grants are recommendations of finance commission.
Discretionary Grants
Under article 282, both centre and states are able to make any grants for public purpose even if they are not within their legislative competence. Since such grants are discretionary, there are no obligations to make such grants. During the planning commission era, these discretionary grants were in fact bigger than statutory grants and that is why planning commission had assumed very important role.
Other Grants
For initial 10 years, constitution had made special grants for Assam, Bihar, Odisha and West Bengal for promotion and protection of jute industry.
