UPSC Prelims 2002 · General Studies

Question 80: Polity and Governance

Which one of the following authorities recommends the principles governing grants-in-aid of the revenues to the states out of the Consolidated Fund of India?

aFinance Commission

bInter-State Council

cUnion Ministry of Finance

dPublic Accounts Committee

AnswerThe answer is (a).

Article 275 provides for grants-in-aid from the Consolidated Fund of India to states that need assistance, and the Finance Commission recommends the principles governing these grants. The Inter-State Council only discusses coordination, the Finance Ministry carries out payments, and the Public Accounts Committee examines audited accounts.

Why each option is right or wrong

(a) Right: the Finance Commission recommends the principles under Article 275.
(b) The Inter-State Council is a forum for coordination and recommends no such principles.
(c) The Finance Ministry implements; it does not lay down these principles.
(d) The Public Accounts Committee scrutinises audit reports.

Explanation: written by UPSC Grade, not by UPSC.

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Source: UPSC, Civil Services (Preliminary) Examination 2002, General Studies. UPSC's own paper isn't online; the words are from a published compilation. The paper on upsc.gov.in.