Constitution of India
Article 275: Grants from the Union to certain States
Part XII — Finance, Property, Contracts and Suits (Chapter I — Finance, Distribution of Revenues between the Union and the States)
Clause (1) — Main provision with two Provisos
WHAT IT SAYS: 1. Parliament may by law charge sums on the Consolidated Fund of India as grants-in-aid to States it determines to be in need of assistance. 2. Different sums may be fixed for different States. 3. FIRST PROVISO: Mandatory grants from CFI for schemes promoting welfare of Scheduled Tribes or raising administration of Scheduled Areas to the level of other areas in that State. 4. SECOND PROVISO: Mandatory grants to Assam covering (a) average excess expenditure over revenue in tribal areas under Part I of the Sixth Schedule, and (b) costs of development schemes approved by Government of India to raise administration levels. WHAT IT MEANS: 1. Two types of grants: (a) discretionary general grants-in-aid to needy States via parliamentary law; (b) mandatory statutory grants for tribal welfare and Scheduled Areas. 2. Grants are CHARGED expenditure — not voted — giving them constitutional priority. 3. Finance Commission recommendations guide the quantum. KEY DOCTRINE: Cooperative Federalism & Fiscal Equalisation — the Union has a constitutional duty to bridge fiscal disparities and ensure targeted development for Scheduled Tribes.
Clause (1A) — Inserted by 22nd Amendment Act, 1969
WHAT IT SAYS: 1. Upon formation of an autonomous State under Article 244A within Assam: (i) Sums payable under Second Proviso clause (a) shall be paid to the autonomous State (if it covers all such tribal areas), or apportioned between Assam and the autonomous State as ordered by the President. (ii) Grants-in-aid equivalent to costs of development schemes for raising administration levels shall be paid from CFI to the autonomous State. WHAT IT MEANS: 1. Extended grants-in-aid mechanism to autonomous tribal States carved from Assam. 2. Presidential discretion to apportion grants if autonomous State covers only some tribal areas. 3. Inserted to accommodate the political demand for tribal autonomy in Assam's hill areas. KEY DOCTRINE: Tribal Self-Governance — financial autonomy follows administrative autonomy under the Sixth Schedule framework.
Clause (2) — Interim Presidential power
WHAT IT SAYS: 1. Until Parliament makes law under Clause (1), the President may exercise those powers by executive order. 2. Such Presidential order is subject to any later parliamentary law. 3. PROVISO: Once a Finance Commission is constituted, no Presidential order shall be made except after considering the Finance Commission's recommendations. WHAT IT MEANS: 1. Ensures no gap in grant-making power — President acts as interim authority. 2. Parliamentary supremacy preserved — any presidential order yields to later legislation. 3. Finance Commission operates as a constitutional check on executive discretion. KEY DOCTRINE: Finance Commission as Constitutional Safeguard — prevents arbitrary executive allocation of grants without expert recommendation.
Constitutional Inspiration
SOURCE(S): 1. Government of India Act, 1935 — Section 142 (Grants from Federation to certain Provinces) Original provision: Empowered the Federation to make grants to provinces for excluded and partially excluded tribal areas. What India kept: The concept of mandatory grants for tribal area administration, expanded to cover all Scheduled Tribes and Scheduled Areas. 2. Australian Constitution — Section 96 (Financial Assistance to States) Original provision: Parliament may grant financial assistance to any State on such terms and conditions as Parliament thinks fit. What India kept: The general principle of grants-in-aid from Centre to States to address fiscal imbalance. INDIA'S SPECIFIC ADAPTATIONS: 1. Mandatory tribal welfare grants — GoI Act 1935 limited grants to excluded areas; India made tribal development a constitutional obligation for all States. 2. Finance Commission check — Unlike Australia's unconditional parliamentary discretion, India interposed a constitutional expert body (Art. 280) to recommend grant amounts. 3. Charged expenditure — Grants under Art. 275 are charged on CFI (not votable), ensuring they cannot be denied by legislative vote, reflecting post-colonial commitment to uplift backward areas. 4. Special Assam provision — Unique to India, reflecting the Sixth Schedule's tribal governance framework for the North-East, not found in any foreign model.
Constituent Assembly Debate
DEBATED ON: 8 August 1949 and 9 August 1949 (CAD Volume IX) DRAFT ARTICLE: 255 (renumbered as Article 275 in the final Constitution) KEY SPEAKERS: 1. Dr. B.R. Ambedkar (Chairman, Drafting Committee) — Proposed two key amendments: (a) replacing 'revenues of India' with 'Consolidated Fund of India'; (b) extending mandatory tribal grants from former British provinces only to ALL States. 2. Shri B. Das (Orissa) — Argued passionately that undeveloped provinces like Orissa, Assam and Bihar deserved equitable resource distribution, not mere 'charity' from the Centre. 3. Syed Muhammad Sa'adulla (Assam) — Pleaded for special financial consideration for Assam's tribal areas given their backwardness under British rule. 4. Shri Brajeshwar Prasad (Bihar) — Offered comments on grants-in-aid provisions during the debate on Article 255. MAJOR DISAGREEMENTS: 1. Tribal area governance — A member proposed deferring debate until tribal areas were constituted, and integrating all tribal areas into one autonomous province under the Union; this was discussed heatedly but rejected. 2. Parliamentary vs Presidential allocation — Some members opposed Parliament deciding grants, fearing inter-State conflict; they wanted the President to determine allocations instead. FINAL OUTCOME: Ambedkar's amendments (CFI terminology, extending tribal grants to all States) were adopted; the provision for interim Presidential power until Parliament legislates was also adopted; Draft Article 255 as amended was adopted on 9 August 1949. AMBEDKAR'S KEY POSITION: The States under our Constitution are co-equal with the Centre; grants-in-aid must extend to all States for tribal welfare, not only former British provinces.
Landmark Judgments
LANDMARK JUDGMENTS: 1. Bhim Singh v. Union of India (2010) — Constitution Bench upheld MPLADS scheme as constitutionally valid; distinguished between Article 275 (statutory, Finance Commission-mediated grants) and Article 282 (discretionary executive grants for public purpose), holding MPLADS fell under Art. 282. 2. Brij Mohan Lal v. Union of India (2002) — Upheld validity of Fast Track Courts scheme funded by 11th Finance Commission allocation of Rs. 502.90 crores under Article 275; directed States to establish 1,734 courts and fill judicial vacancies. 3. S.R. Bommai v. Union of India (1994) — While primarily on President's Rule, observed that fiscal federalism provisions including Art. 275 reflect that federalism in India is not administrative convenience but constitutional principle; States are supreme within their allotted sphere. NOTABLE OBSERVATIONS: 1. In Bhim Singh (2010), the Court noted that Article 275 envisages a permanent/regular system of financial transfers mediated by the Finance Commission, while Article 282 covers one-time or emergency expenditure. 2. K.K. Venugopal argued in Bhim Singh that permanent annual fund transfers must fall under Article 275, not Article 282. SCHOLARS & JURISTS: 1. M.P. Jain — Article 275 grants are 'statutory grants' being charged expenditure, distinguishing them from discretionary grants under Article 282. 2. D.D. Basu — Article 275 represents the Constitution's commitment to fiscal equalisation and tribal upliftment, operating in tandem with the Finance Commission under Article 280.