Consider the following statements with reference to Grants-in-aid in India:
1. Grants-in-aid are to be given to those states which are in need of financial assistance
2. Constitution allows the grants-in-aid to be discriminatory in nature
3. The grants-in-aid to the local bodies comes from Consolidated Fund of India
Which among the above is / are correct statements?

Answer: [A] Only 1 & 2

The first and second statements are correct. Under Article 275. grants-in-aid are to be given to States as are in need of financial assistance, and these grants can vary and be discriminatory in nature. Grants are primarily intended to correct Inter-State disparities in financial resources and to co-ordinate the maintenance and expansion of the welfare schemes of the State Governments on a uniform national level.

Third statement is not correct as  grants-in-aid to the local bodies come from the Consolidated Fund of the State, as per the recommendations of the state finance commissions.

This question is a part of GKToday's Integrated IAS General Studies Module