Constitution of India
Article 282: Expenditure defrayable by the Union or a State out of its revenues
Part XII — Finance, Property, Contracts and Suits (Chapter I — Finance, Sub-heading: Miscellaneous Financial Provisions)
Article 282 (no sub-divisions — single article)
WHAT IT SAYS: The Union or a State may make any grants for any public purpose, even if the purpose is not one on which Parliament or the State Legislature may make laws. WHAT IT MEANS: 1. Both Centre and States can spend money on subjects OUTSIDE their legislative competence under the Seventh Schedule. 2. The only condition is that expenditure must serve a 'public purpose'. 3. Grants under this Article are discretionary — not routed through the Finance Commission. 4. This is the constitutional basis for Centrally Sponsored Schemes (CSSs). 5. No separate legislation required — Appropriation Act suffices. KEY DOCTRINE: Doctrine of Spending Power — the power to spend is wider than the power to legislate; governments can financially support activities beyond their legislative domain.
Constitutional Inspiration
SOURCE(S): 1. Government of India Act, 1935 — Section 150(2) Original provision: Allowed the Federal or Provincial government to make grants for any purpose from its revenues. What India kept: Retained the structure but added the qualifier 'public purpose' to limit potential misuse. 2. USA — Article I, Section 8, Clause 1 (Spending Clause) Original provision: Congress may lay taxes and spend for the 'general welfare of the United States.' What India kept: The concept that spending power extends beyond enumerated legislative powers. 3. Australia — Section 81 and Section 96 (Financial Agreement provisions) Original provision: Consolidated Revenue Fund may be appropriated for purposes of the Commonwealth; Parliament may grant financial assistance to States on terms it sees fit. What India kept: The idea of flexible grants to sub-national units beyond strict legislative lists. INDIA'S SPECIFIC ADAPTATIONS: 1. Used 'public purpose' instead of 'general welfare' — to provide a broader yet constitutionally anchored test. 2. Empowered BOTH Union AND States equally — unlike USA/Australia where only the federal government has broad spending power. 3. Placed under 'Miscellaneous Financial Provisions' — signalling original intent as a residual/ad hoc power, not the primary channel for inter-governmental transfers.
Constituent Assembly Debate
DEBATED ON: 10 August 1949 (CAD Volume IX) DRAFT ARTICLE NUMBER: Draft Article 262 KEY FACTS: 1. There was NO substantive debate or discussion on Draft Article 262. 2. The article was adopted as-is, without any amendments, by voice vote. 3. President Dr. Rajendra Prasad simply asked if anyone wished to speak, and the motion was adopted. 4. Only a verbal amendment (No. 141) regarding substitution of 'Consolidated Fund of India' for 'revenues of India' was noted but left to the Drafting Committee. KEY SPEAKERS: 1. Dr. Rajendra Prasad (President) — Put the question: 'That article 262 stand part of the Constitution' — adopted without discussion. 2. Shri H.V. Kamath — Raised a point about amendment No. 2951 (verbal, substituting 'revenues of India' with 'Indian revenues') but it was rendered moot. MAJOR DISAGREEMENTS: 1. None — the article was passed without contest. POST-ADOPTION COMMENTARY: 1. K. Santhanam (Chairman, 2nd Finance Commission) later observed: 'This was not intended to be one of the major provisions for making readjustments between the Union and the States.' 2. Multiple Finance Commissions have noted that Article 282 was meant for ad hoc/emergency grants, not regular transfers. FINAL OUTCOME: Draft Article 262 adopted without any amendment or debate on 10 August 1949.
Landmark Judgments
LANDMARK JUDGMENTS: 1. Bhim Singh v. Union of India (2010) — 5-Judge Constitution Bench held MPLADS is intra vires Article 282; Article 282 cannot be given a restrictive interpretation; it is an independent, non-subordinate source of spending power; 'public purpose' includes creation of durable community assets. 2. S. Subramaniam Balaji v. Govt. of Tamil Nadu (2013) — Held that 'public purpose' under Article 282 must be interpreted in light of DPSPs; distribution of free TVs/goods by State government is a valid public purpose; courts should not interfere unless expenditure is unconstitutional. 3. State of West Bengal v. Union of India (1963) — Affirmed that both Union and States have constitutional authority to make grants for public purposes not restricted by legislative competence. 4. Lok Prahari v. State of UP (2016) — Reiterated that MPLADS is intra vires Article 282 and falls within the meaning of 'public purpose'. NOTABLE DISSENTS & OBSERVATIONS: 1. Justice A.S. Qureshi (Dissent Note, 9th Finance Commission, 2nd Report) — Observed that Article 282 was never envisaged as a regular channel of fund transfer; regular grants should flow only through Article 275. 2. Third Finance Commission — Recommended that 75% of total grants should be made under Article 275, not Article 282. SCHOLARS & JURISTS: 1. D.D. Basu — Article 282 gives power to grant funds for subjects outside legislative competence, provided they serve public purposes. 2. K. Santhanam (Chairman, 2nd Finance Commission) — Stated this article was meant for exceptional/emergency situations, not a permanent mechanism for Centre-State financial transfers.