Article 282 and Centrally Sponsored Scheme - a spring of federal strain

M. Jai Ganesh and C. Rabbiraj

International Journal of Electronic Finance, 2025, vol. 14, issue 3, 303-316

Abstract: The financial transfers made by the federal government to the states serve as a major source of funding for Centrally Sponsored Schemes (CSSs). These programs, which were created and received some funding from the federal government, are implemented by the state governments. Budget estimates for 2021-2022 indicate that around 25% of the fiscal transfers to states will go to CSSs. However, it has been questioned whether Article 282's provisions regarding discretionary grants accord to the structure of the original constitution. The purpose of Article 282 was not to alter the Union's relationship with the states significantly. If that had been the plan, the complex ties between the shares, grants, and assignments would not have been necessary. It does not seem necessary for the centre to be able to assist the states through two separate articles (Articles 275 and 282), one through the Finance Commission and the other through executive authority. Even parliamentary legislation is not necessary for executive discretion. This empirical analysis reveals how CSSs and Article 282 undermine fiscal federalism in India.

Keywords: federalism; intergovernmental fiscal transfers; IGFTs; Planning Commission; discretionary grants; Article 282; Centrally Sponsored Schemes; CSSs; state government; fiscal federalism; social purpose. (search for similar items in EconPapers)
Date: 2025
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