Article 273 of the Indian Constitution addresses the issue of grants in lieu of export duty on jute and jute products for specific states. In particular, it pertains to the states of Assam, Bihar, Orissa, and West Bengal. This article mandates that the Consolidated Fund of India shall allocate grants to these states instead of assigning a share of the net proceeds of export duty on jute and jute products, with the specific sums to be prescribed by law.
What does Article 273 states ?
Grants in lieu of export duty on jute and jute products
(1) There shall be charged on the Consolidated Fund of India in each year as grants in aid of the revenues of the State of Assam, Bihar, Orissa and West Bengal, in lieu of assignment of any share of the net proceeds in each year of export duty on jute and jute products to those States, such sums as may be prescribed
(2) The sums so prescribed shall continue to be charged on the Consolidated Fund of India so long as any export duty on jute or jute products continues to be levied by the Government of India or until the expiration of ten years from the commencement of this Constitution, whichever is earlier
(3) In this article, the expression prescribed has the same meaning as in Article 270 .
Background of Article 273
- The deliberations of the Constituent Assembly revolved around the examination of Draft Article 254, with the objective of crafting Article 273 within the framework of the Indian Constitution. The discourse pertaining to this article transpired on the 8th of August, 1949.
- This article examines the allocation of a specific percentage of the export duty collected by the Union government on jute and jute-based products.The allocation of these levies would be directed towards the States where jute cultivation takes place.
- Nevertheless, the proposal of a modification was put forth by the Chairman of the Drafting Committee. The proposal put out entails a shift from the current practice of allocating a predetermined percentage of export duty. Instead, it suggests that the government should annually take a specific amount of funds from the Consolidated Fund of India to provide assistance to the states of Bengal, Bihar, Assam, and Orissa.
- Furthermore, the allocation of funds would be determined by the President, and the provision of such assistance would be limited to a duration of up to a decade.
- After a thorough deliberation, the proposed modification was ultimately ratified. The revised edition of the Draft Article was incorporated into the Constitution of India on August 8, 1949.
Clauses of Article 273
Clause (1) :-
- The initial provision of Article 273 pertains to the allocation of a certain monetary sum by the Government of India on an annual basis, intended for distribution among the states of Assam, Bihar, Odisha, and West Bengal. The purpose of this funding is to provide financial assistance to the aforementioned states.
- Instead of receiving a portion of the government’s tax revenue generated from the export of jute and jute-based products, this sum is being allocated to them. The annual allocation of funds to these States will be set by the Government of India.
Clause(2) :-
- According to the second clause of Article 273 in the Indian Constitution, the funds allocated by the Government of India for the states of Assam, Bihar, Odisha, and West Bengal will be sourced from the Consolidated Fund of India as long as the Government of India continues to levy taxes on the export of jute or jute-based products. The aforementioned sum may be withdrawn from the Consolidated Fund of India for a duration of up to ten years from the initiation of the Indian constitution, or until the occurrence of the earlier event.
- Nevertheless, due to the temporal limitation of this clause, which was only applicable during the initial decade following the enactment of the constitution, it might be argued that this article has become entirely inconsequential and lacks any relevance or influence.
Clause(3) :-
- The concluding provision of Article 273 emphasizes that the term “prescribed” as used in this article carries the same connotation as the term “prescribed” in Article 270 of the Indian Constitution.
- To clarify, the usage of the term “prescribed” in this article is intended to convey the same definition as its usage in Article 270.
- According to Article 270 of the Indian Constitution, the term “prescribed” denotes a determination made by the President of India. Prior to the establishment of the Finance Commission, the determination of the quantum is entrusted to the President.
- Subsequent to the establishment of the Finance Commission, the determination of the amount will be at the discretion of the President, who will take into account the suggestions put out by the Finance Commission.
Key aspects of Article 273
1. States Covered: Article 273 primarily benefits the states of Assam, Bihar, Orissa, and West Bengal. These states historically had a significant stake in the production and export of jute and jute products.
2. Grants in Lieu of Export Duty: Instead of these states receiving a share of the net proceeds from the export duty on jute and jute products, the Consolidated Fund of India provides grants to them. These grants are intended to aid the revenues of these states and support their financial well-being.
3. Prescribed Sums: The specific amounts to be granted to these states are not fixed within the Constitution itself but are determined by law. The term “prescribed” in this context refers to the figures set by legislative action, ensuring that the grant amounts can be adjusted as needed.
4. Duration: Article 273 contains a time-bound provision. The grants will continue to be charged on the Consolidated Fund of India until either the government ceases to levy export duty on jute and jute products or until ten years have passed from the commencement of the Constitution, whichever occurs first.
5. Consolidated Fund of India: Similar to other financial provisions in the Constitution, the funds for these grants are sourced from the Consolidated Fund of India. This fund centralizes government finances and ensures transparency and accountability in the use of public money.
6. Federal Financial Arrangements: Article 273 exemplifies the federal financial arrangements in India, balancing the interests of the Union and the States. It recognizes the importance of certain states in the jute industry and seeks to support their financial stability through grants.