This paper argues that the present structure of Union-State financial transfers is one of the reasons for India’s ad hoc, scheme-based welfare structure. Scholars such as Ruparelia (2013) and Tillin et al. (2015) have praised India’s attempts to codify some welfare entitlements, such as the right to food and public works, and have argued that there is a need for more robust statutory measures in other areas as well. In this paper, I argue that the push for statutory rights must be seen in light of Union-State financial relations. Many important welfare measures are made by way of tied grants, or Centrally Sponsored Schemes (CSS), under Article 282 of the Constitution. This is not unconstitutional, and may perhaps even have been intended by the framers of the Constitution. Nevertheless, CSS are an important practical limitation on States’ ability to legislate on welfare subjects within their competence and to take on programmes different from those designed by the Union. Further, I argue that there is a need for restructuring the current system of CSS to allow the States greater autonomy in designing welfare programmes, and to enable States to provide stable, statute-based entitlements for social and economic welfare.
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