The Constitution of India
Article 273
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 States 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.
Why this exists
Before independence, jute (grown mainly in Bengal and neighboring regions) was a major export earner, and export duties on it were an important revenue source shared with jute-growing provinces. When the Constitution centralized fiscal powers, the framers created this special transitional arrangement so that jute-producing states wouldn't lose out on revenue they previously depended on, while allowing the central government flexibility to eventually phase out export duties on jute without leaving these states short-changed overnight.
Common misconceptions
- Myth: Article 273 gives these states a permanent right to jute export revenue.
Fact: The grants were time-limited — capped at ten years from the Constitution's commencement or until the jute export duty itself was withdrawn, whichever happened first. - Myth: The Article applies to any state that grows jute.
Fact: It specifically names only Assam, Bihar, Orissa and West Bengal, not any other jute-growing region.