Distribution of Non-Tax Revenues and Grants
Q. Which of the following are true regarding non-tax revenues and grants?
1) A non-tax revenue source for centre is fisheries.
2) A non-tax revenue source for states is forests.
3) Article 275 deals with statutory grants.
4) Share of discretionary grants has become larger than statutory grants.- Published on 24 Feb 17a. 2, 3, 4
b. 1, 3, 4
c. 1, 2
d. All of the above
ANSWER: 2, 3, 4
Major sources of non-tax revenue of Centre -
- Posts, telegraphs, railways, banking, escheat and lapse, coinage and currency, broadcasting, and currency and Central Public Service Enterprises.
Major sources of non-tax revenue of State -
- Forests, irrigation, escheat and lapse, fisheries and State Public Service Enterprises.
- As per Article 275 Parliament can decide which states are in need of financial assistance and can provide them with grants-in-aid.
- These grants-in-aid are given every year and are charged on the Consolidated Fund of India.
- Parliament can decide which state should be given how much amount.
- The Constitution also provides for specific grants.
- They can be for promoting the welfare of the scheduled tribes in a state or for improving the administration of the scheduled areas in a state including the State of Assam.
- The Finance commission recommends providing all the statutory grants (under Article 275) to the states.
- Article 282 - The Union or a State may make any grants for any public purpose, even if that purpose is not one within their scope of legislative authority.
- Planning Commission recommends the Union and States to make grants under this provision.
- As per M. P. Jain, “These grants are also known as discretionary grants, the reason being that the Centre is under noo bligation to give these grants and the matter lies within its discretion. These grants have a two-fold purpose: to help the state financially to fulfill plan targets; and to give some leverage to the Centre to influence and coordinate state action to effectuate the national plan.”
- Since, the discretionary grants have become larger than the other grants like the statutory grants, Planning Commission has assumed greater significance than the Finance Commission
- These grants-in-aid are for a temporary period.
- Under this, grants in lieu of export duties on jute and jute products were provided to the States of Assam, Bihar, Orissa and West Bengal.
- They were charged on the Consolidated Fund of India.
- They were made on the recommendation of the Finance Commission.
