The Centre provides grants-in-aid to the statesa)to maintain friendly ...
Besides sharing of taxes between the Centre and the states, the Constitution provides for grants-in-aid to the states from the Central resources. There are two types of grants-in-aid, viz, statutory grants and discretionary grants.
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The Centre provides grants-in-aid to the statesa)to maintain friendly ...
Grant-in-Aid to States
Grant-in-aid is a financial assistance provided by the Centre to the states to support them in various activities. The grant-in-aid is given to the states without any obligation for repayment. The Centre provides grant-in-aid to the states for several purposes, such as maintaining friendly relations between the Centre and the states, for use in centrally sponsored schemes, to cover gaps on revenue accounts, and for meeting expenses of the state plan project.
Gaps on Revenue Accounts
Grant-in-aid is provided to the states to cover gaps on revenue accounts. The revenue accounts of the states include taxes, duties, fees, and other such sources of income. Sometimes, the revenue generated by the states may not be sufficient to meet their expenses. In such cases, the Centre provides grant-in-aid to the states to cover the gaps. This helps the states to undertake various beneficial activities without any financial constraints.
State Plan Projects
The grant-in-aid is also provided to the states for meeting the expenses of state plan projects. The state plan projects are the projects undertaken by the states for the development of their respective states. The states prepare the plan projects based on their priorities and needs. The Centre provides financial assistance to the states to implement these projects. The grant-in-aid helps the states to implement their plan projects effectively and efficiently.
Conclusion
In conclusion, the Centre provides grant-in-aid to the states for several purposes, such as maintaining friendly relations between the Centre and the states, for use in centrally sponsored schemes, to cover gaps on revenue accounts, and for meeting expenses of the state plan project. The grant-in-aid is an essential source of financial assistance for the states, which helps them to undertake various beneficial activities and implement their plan projects effectively and efficiently.