Part of Scotland cheerful, having received grant (8)
I believe the answer is:
galloway
'part of scotland' is the definition.
('Galloway' is part of 'scotland')
'cheerful having received grant' is the wordplay.
'cheerful' becomes 'gay' (similar in meaning).
'having received' is an insertion indicator.
'grant' becomes 'allow' (synonyms).
'gay' going around 'allow' is 'GALLOWAY'.
(Other definitions for galloway that I've seen before include "Scots beef" , "farm animal" , "Area of southwest Scotland" , "Respect MP" , "Scots breed of cattle" .)