Grants from the Union to certain States

Draft Article 255, Draft Constitution of India 1948

Such sums, as Parliament may by law provide, shall be charged on the revenues of India in each year as grants-in-aid of the revenues of such States as Parliament may determine to be in need of assistance, and different sums may be fixed for different States:

Provided that there shall be paid out of the revenues of India as grants-in-aid of the revenues of a State for the time being specified in Part I of the First Schedule such capital and recurring sums as may be necessary to enable that State to meet the costs of such schemes of development as may be undertaken by the State with the approval of the Government of India for the purpose of promoting the welfare of the scheduled tribes in that State or raising the level of administration of the scheduled areas in that State to that of the administration of the rest of the areas of that State:

Provided further that there shall be paid out of the revenues of India as grants-in-aid of the revenues of the State of Assam sums, capital and recurring, equivalent to-

(a) The average excess of expenditure over the revenues during the three years immediately preceding the commencement of this Constitution in respect of the administration of the tribal areas specified in Part I of the table appended to paragraph 19 of the sixth Schedule; and

(b) The costs of such schemes of development as may be undertaken by that State with the approval of the Government of India for the purpose of raising the level of administration of the said areas to that of the administration of the rest of the areas of that State.

Article 275, Constitution of India 1950

(1) Such sums as Parliament may by law provide shall be charged on the Consolidated Fund of India in each year as grants-in-aid of the revenues of such States as Parliament may determine to be in need of assistance, and different sums may be fixed for different States:

⁠Provided that there shall be paid out of the Consolidated Fund of India as grants-in-aid of the revenues of a State such capital and recurring sums as may be necessary to enable that State to meet the costs of such schemes of development as may be undertaken by the State with the approval of the Government of India for the purpose of promoting the welfare of the Scheduled Tribes in that State or raising the level of administration of the Scheduled Areas therein to that of the administration of the rest of the areas of that State:

⁠Provided further that there shall be paid out of the Consolidated Fund of India as grants-in-aid of the revenues of the State of Assam sums, capital and recurring, equivalent to—

⁠(2) Until provision is made by Parliament under clause (1), the powers conferred on Parliament under that clause shall be exercisable by the President by order and any order made by the President under this clause shall have effect subject to any provision so made by Parliament:

⁠Provided that after a Finance Commission has been constituted no order shall be made under this clause by the President except after considering the recommendations of the Finance Commission.

Draft Article 255 (Article 275, Constitution of India 1950) was discussed on 8 August 1949 and 9 August 1949. It empowered Parliament to make law to provide financial assistance to States in the form of grants-in-aid charged to the revenue of India. The Draft Article also mandated that States which were erstwhile British provinces would be compensated for their expenditure on promoting the welfare of Scheduled Tribes and administering Scheduled Areas. Assam was also to be provided grants-in-aid for administering tribal areas specified in Part I of the Sixth Schedule.

The Chairman of the Drafting Committee proposed minor amendments to this Draft Article. First, to change the phrase ‘revenues of India’ to ‘Consolidated Fund of India’. Second, to include all States for the mandatory provision of compensation for expenditure on Scheduled Tribes and tribal areas. Third, to change the manner of calculating grants-in-aid to be given to Assam.

Some Members opposed the Draft Article as it empowered the Parliament to make laws on financial assistance given to States. They believed that it would cause conflict among representatives of various States. A Member proposed that President should determine the grants-in-aid to be provided to States.

Some Members raised concerns in relation to the constitution of tribal areas. The Draft Article refers to the powers of State governments to administer tribal areas however, the constitution of tribal areas was yet to be decided. A member proposed that this Draft Article should be discussed after tribal areas have been constituted and that all the tribal areas should be integrated into one province and administered by an autonomous body under the Union government – this would be in line with principles of self-determination.

After heated discussions, the Assembly adopted the amendments.

A Member moved a minor amendment to the amendment proposed by the Chairman of the Drafting Committee to provide that until the Parliament determines by law the amount to be distributed to States, the President would have the discretion to allocate grants-in-aid to the States. This amendment was adopted.

Draft Article 255 as amended, was adopted on 9 August 1949.

Article 275 was amended in 1969 through the Constitution (Twenty-second Amendment) Act, 1969 to include autonomous States as well.