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Grants from the Centre to the States under the recommendations of the Finance Commission are known as
  • a)
    Plan grants
  • b)
    Development assistance
  • c)
    Statutory grants
  • d)
    Discretionary grant
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
Grants from the Centre to the States under the recommendations of the...
Explanation:

Grants from the Centre to the States are an important aspect of fiscal federalism in India. These grants are given by the Central Government to the State Governments under various schemes and programmes. Grants are given by the Centre to the States under the recommendations of the Finance Commission.

Statutory Grants:

Grants from the Centre to the States under the recommendations of the Finance Commission are known as Statutory Grants. These grants are provided to the States as per the provisions of the Constitution of India. The grants are given to the States for the purpose of promoting their welfare and development. The grants are provided to the States in the form of tax devolution, grants-in-aid, and specific grants.

Tax Devolution:

Tax devolution is the distribution of taxes collected by the Central Government among the States. The Finance Commission determines the share of each State in the taxes collected by the Central Government. The share of each State is determined based on the population and other factors.

Grants-in-Aid:

Grants-in-aid are given to the States by the Central Government for specific purposes. These grants are provided to the States to meet the expenditure incurred by them for implementing various schemes and programmes.

Specific Grants:

Specific Grants are given to the States by the Central Government for specific purposes. These grants are given to the States for implementing specific schemes and programmes. The grants are provided to the States for the purpose of promoting their welfare and development.

Conclusion:

Thus, it can be concluded that grants from the Centre to the States under the recommendations of the Finance Commission are known as Statutory Grants. These grants are given to the States in the form of tax devolution, grants-in-aid, and specific grants. The grants are provided to the States for the purpose of promoting their welfare and development.
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Grants from the Centre to the States under the recommendations of the...
  • Vertical and horizontal imbalances are common - features of—most federations. The Constitution assigned taxes with a nation-wide base to the Union to make the country one common economic space unhindered by internal barriers to the extent possible.
  • States being closer to people and more sensitive to the local needs have been assigned functional responsibilities involving expenditure disproportionate to their assigned revenue sources, resulting in vertical imbalances. The devolution of taxes from the centre helps them fulfil these responsibilities.
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Grants from the Centre to the States under the recommendations of the Finance Commission are known asa) Plan grantsb) Development assistancec) Statutory grantsd) Discretionary grantCorrect answer is option 'C'. Can you explain this answer?
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