Article 275 of the Indian Constitution is a key provision under Part XII that governs the financial relationship between the Union and the States, specifically dealing with Grants from the Union to certain States. It was enacted on January 26, 1950, as part of the original Constitution, and its draft, Article 255, was discussed in the Constituent Assembly in August 1949. The provision was created to address financial imbalances and ensure that States facing economic hardship or structural disadvantages receive financial assistance from the Union, thereby promoting balanced regional development and cooperative federalism.
The core mechanism is laid out in Clause (1), which states that Parliament may by law provide for sums to be charged on the Consolidated Fund of India as grants-in-aid of the revenues of such States as it determines to be in need of assistance. A crucial aspect is the first proviso to Clause (1), which mandates special grants for the purpose of promoting the welfare of Scheduled Tribes or raising the level of administration of Scheduled Areas in a State. These grants are distinct from the mandatory tax devolution under Article 270. The provision connects directly to the Finance Commission, established under Article 280, as the President is required to consider the Commission's recommendations before making any order regarding grants under Clause (2), which gives the President interim power until Parliament makes a law. A significant amendment occurred in 1969 through the Constitution (Twenty-second Amendment) Act, which added Clause (1A) to include provisions for grants to an autonomous State formed under Article 244A. While the provision itself has remained, its implementation is often debated, with recent discussions focusing on the nature of these grants compared to discretionary grants under Article 282.