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The Union or a State may make grants for any public purpose, even if that purpose isn't one Parliament or that State Legislature could actually make laws about.
This lets governments fund public-purpose grants and schemes even on subjects outside their normal law-making competence - spending money for a good public cause doesn't require the same strict subject-matter jurisdiction that passing a binding law on that subject would need.
This is one basis for the Union government funding certain welfare or development schemes that touch on subjects more typically associated with state jurisdiction, since making a grant is treated differently from actually legislating on that subject.