Grants-in-aid given to States are meanta) to show favour to backward ...
- A grant-in-aid is money coming from the central government for a specific project. This kind of funding is usually used when the government and parliament have decided that the recipient should be publicly funded but operated with reasonable independence from the state.
- A grant-in-aid is funds allocated by one government level to another level of government to be used for specific purposes.
View all questions of this test
Grants-in-aid given to States are meanta) to show favour to backward ...
Grants-in-aid given to States are meant to cover gaps on revenue account so that States can undertake beneficial activities. This means that the funds are provided to the States to help them overcome their revenue deficits and undertake development activities that they would otherwise not be able to do.
Explanation:
Grants-in-aid are financial assistance provided by the Central Government to the States for specific purposes. The grants are given to the States to supplement their resources and help them undertake development activities that they would otherwise not be able to do due to revenue deficits.
The grants-in-aid are of two types:
1. Plan Grants: These are given to the States for implementing their plans. The grants are used for specific projects and programs that are included in the State plan.
2. Non-Plan Grants: These are given to the States for their general requirements, such as salaries, pensions, and maintenance of assets.
The purpose of grants-in-aid is to provide financial assistance to the States to undertake beneficial activities. The funds are provided to cover the gaps on revenue account so that the States can undertake development activities without facing budgetary constraints.
Grants-in-aid are not meant to show favour to backward States, as the distribution of grants is based on objective criteria such as population, area, and level of development.
Grants-in-aid are also not meant for funding the State plan, as plan grants are given separately for this purpose.
Therefore, the correct answer is option C - Grants-in-aid given to States are meant to cover gaps on revenue account so that States can undertake beneficial activities.