Phase IFoundation
Background
Overview
Essential for understanding the mechanisms of fiscal federalism, how the Union supports states, and the policy debates around balancing fiscal prudence with equity and regional development.
Grants-in-aid, provided for under Article 275 of the Indian Constitution, are financial transfers from the Union government to the States. They are designed to address specific needs, bridge revenue deficits, and promote equalisation among states, especially where formula-based tax devolution falls short.