A grant-in-aid is money coming from a central government for a specific project. Such funding is usually used when the government and the legislature decide that the recipient should be publicly funded but operate with reasonable independence from the state. In the United Kingdom, most bodies in receipt of grants-in-aid are non-departmental public bodies. A grant-in-aid has funds allocated by one level of government to another level of government that are to be used for specific purposes. Such funds are usually accompanied by requirements and standards set by the governing body for how they are to be spent. An example of this would be how the US Congress has required states to raise the drinking age for alcohol from 18 to 21 for the individual states to continue to qualify for federal funds for interstate highways within each state. In India, Grants-in-Aid are given to the states besides the sharing of taxes between the Centre and States. Article 275 of Indian Constitution empowers the Parliament to make grants to only those states that need financial assistance. This sum is charged on the Consolidated fund of India every year. It's also granted for the welfare of Scheduled Tribes in a state and the administration of scheduled areas in some states such as Assam. Finance Commission recommends it. Article 282 provides for both Centre and the States to make any grants for any public purpose. It's in the discretion of the government, not a statutory obligation. This also helps in implementing national plans effectively. There was another temporary form of grants-in-aid for a period of ten years after independence. It was given to jute producing states in Eastern India in lieu of export duties on jute and jute products on the recommendations of Finance Commission.


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Explanation by British government
Category:Government finances Category:Grants (money) {{Econ-policy-stub