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Grants And Borrowings - Union State Financial Relations
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In this lecture, the lecturer discuses constitutional provisions and utility of various grants given by Union to States and then he discusses powers of Union and States to borrow money.

Bhavin Sangoi
BA Political Science and Psychology, Mumbai University. Teaching Polity, Economics and international relations for 7 years.

Unacademy user
awesome explanation's extremely our self study...kindly complete whole of the polity
Thanks sir for such an enlightening series on such an important matter especially the grants ,borrowings ,taxes,etc .I always found it difficult to grasp the logic behind these provisions thus failed to remember in exam . Cant thank you enough ! :)
can states borrow from international or foreign financial institutions with permission of union government like "kerala getting funds from world bank ? "
Thankuu plz make more lectures
can state government take loan from international organizations like world bank with permission of union government
Bhavin Sangoi
3 years ago
Yes they can.
  1. Course Name: In-depth study of Centre State Relations Lesson Name: Union State financial relation IIl Presented by Bhavin Sangoi

  2. About me B.A in Political Science & Psychology Appeared in UPSC CSE Mains ec Indian Polity, International Relations, economics &mental Ability since 5 years Experience of teaching for various competitive exams such as NTSE, CET & UPSC Like, Rate and Review this course Follow me on:

  3. General Grants CAccord ng to article 275 (1), Parliament may by law provide grants-in-aidto the States who are in the need of assistance. The sum would be charged to the Consolidated fund of India and different sum may be fixed for different States The sum are fixed on the recommendation of Finance commission

  4. Specific Grants According to article 275 (2), grants-in-aid shall be paid out of the Consolidated fund of India to meet the cost of those development schemes undertaken by the State with the approval of Government of India for promoting the welfare of Schedule Tribes or development of Schedule Area in the State.

  5. Discretionary Grants Under Article 282, the Union or a State can make any grants for any public purpose, not withstanding that the purpose is not one with respect to which Parliament or the Legislature of a State, may make laws. The grants under Article 275 which can be dispensed only on the recommendations of the Finance Commission and are charged, grants under Article 282 can be made with no such restriction and are voted

  6. Public Borrowing by Union According to article 292, the executive power of the Union extends to borrowing or giving guarantee upon the security of the Consolidated Fund of India within such limits, if any, as may from time-to-time be fixed by Parliament by law

  7. Public Borrowing by State According to article 293 a State can borrow within the territory of India or give guarantee upon the security of the Consolidated Fund of the State. However, a State may not raise any loan, without the permission of Government of India, if any part of the loan extended by the Government of India remains outstanding