Post Devolution Revenue Deficit (PDRD) Grant

Why in news?

• The Department of Expenditure, Ministry of Finance, today released a monthly Post Devolution Revenue Deficit (PDRD) Grant of Rs 9,871 crore to 17 states. This was the 11th instalment of the PDRD grant released to the states.

About PDRD grant:

• The Post Devolution Revenue Deficit Grant is provided to the States under Article 275 of the Constitution.
• The grants are released as per the recommendations of the Fifteenth Finance Commission in monthly installments to meet the gap in Revenue Accounts of the States post devolution.
• The Commission has recommended PDRD grants to 17 States during 2021-22.
• The eligibility of States to receive this grant and the quantum of grant was decided by the Commission based on the gap between assessment of revenue and expenditure of the State after taking into account the assessed devolution for the financial year 2021-22.

About Article 275 of the Constitution:

• It provides for the payment of such sums as Parliament may by law provide as grants-in aid to such States as Parliament may determine to be in need of assistance.
• The grants are paid out of the Consolidated Fund of India in each year, and different sums may be fixed for different States.
• These grants are to be of the nature of capital and recurring sums as may be necessary.
• These aim to enable that State to meet the costs of such schemes of development as may be undertaken by it with the approval of the Government of India for the purpose of promoting the welfare of the Scheduled Tribes in that State or raising the level of administration of the Scheduled Areas there in to that of the administration of the rest of the areas of that State.
• Grants are primarily intended to correct Inter-State disparities in financial resources and to coordinate the maintenance and expansion of the welfare schemes of the State Governments on a uniform national level.

PRACTICE QUESTION:

With reference to ‘Post Devolution Revenue Deficit Grant’, consider the following statements:

1. It is provided by the central government to the state governments under Article 275 of the Constitution.

2. The grants are released as per the recommendations of the Finance Commission

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Answer