This grant was decided  on  the extent  of  revenue  of  the  merging  state,  roughly  amounting  to  8.5%  of  the  annual revenue of respective state.

It  was  also  decided  that  the  privy  purses  would  be  gradually  reduced  over  the  period  of  time.  This arrangement  was  so  important  that  it  found  place  in  the  Constitution  of  India  under  Articles  291  and 362.  Abolition of Privy Purses Despite not being heavily burdensome on the public exchequer, the then Prime Minister was insistent on abolishing the privy purses.  In 1971, the Constitution was amended abolishing privy purses

1.       Hereditary  privileges  were  not  in  consonance  with  the  principles  of  equality  and  socio-economic justice laid down in the Indian Constitution.

2.       What the rulers surrendered  was  not  their  personal  wealth  or  income.  It belonged to the  people therefore the privilege was against the ideal of justice.

3.       Abolition  was  in  consonance with  the modern values of  rationalism,  where  we  can’t  bestow privileges on someone merely due to the accident of him being born in a particular family.

4.       Abolition was necessary to end the feudal social structure.

Abolition of Privy purses as a betrayal of promise:

1.        Privy Purses was a solemn promise made by Constituent Assembly to the  princes and was provided constitutional backing. Therefore, abolishing it betrayed that promise.

2.       Privy purses were a very small price for priceless integration of Indian Union. The amount was meagre and was a token of gratitude towards the princes.