The Indian Parliament has received the latest batch of Supplementary Demands for Grants for the financial year (FY) 2019-20, brought forth by the Finance Minister. The delivery of these grants is a pivotal process for maintaining sound fiscal management and addressing unforeseen or additional expenses that were not part of the original budget. This occurrence not only sheds light on the immediate financial needs of the nation, but also serves as an opportunity to delve into India’s intricate system of grants and its corresponding constitutional provisions.
Understanding Supplementary Grants
Supplementary Grants are presented to the Parliament when the initially approved grants are insufficient to cover the required expenditures. Their function is to compensate for deficits in the budget allocation. The Comptroller and Auditor General of India has the responsibility to identify instances where expenditure exceeds the authorised grants, and bring them to the Parliament’s attention. Following this, the Public Accounts Committee scrutinizes these excesses and makes appropriate recommendations. All Supplementary Grants must be approved and accepted by Parliament by the end of the FY, which falls between 1st April and 31st March.
Exploring Other Grants
In addition to Supplementary Grants, there exist several categories of grants utilized to address various financial scenarios.
The ‘Additional Grant’ caters to unexpected expenses arising during the current FY for services not encompassed in the initial budget. For instance, the grants requested for FY 2019-20 includes an allocation of over Rs 8,000 crore for the newly established Union Territories of Jammu and Kashmir and Ladakh, and Rs 20 crore for maintaining Ayodhya.
On the other hand, an ‘Excess Grant’ is provided when the money expended on any service within the FY exceeds the amount granted for said service in that year’s budget. The Lok Sabha votes on these grants after the end of the FY. Before being submitted to Lok Sabha for voting, they should be approved by the Parliament’s Public Accounts Committee.
A ‘Vote of Credit’ is granted to meet unforeseen demands on India’s resources that cannot be stated with the details ordinarily given in a budget due to the size or indefinite nature of the service.
The ‘Exceptional Grant’ is provided for a special purpose and is not part of the current service of any FY. Meanwhile, the ‘Token Grant’, which involves a nominal token sum (of Re 1), is sought when funds for a new service can be made available through reappropriation, i.e., transferring funds from one head to another.
Supplementary Grants in The Constitution of India
The Lok Sabha is also empowered by the Constitution to make ‘Votes on Account’, which are advanced grants pertaining to the estimated expenditure for a part of the FY. Given pending the completion of the voting of the demands for grants and the passing of the appropriation bill, this provision, known as the ‘vote on account’, is typically granted for two months for an amount equivalent to one-sixth of the total estimation.
| Type of Grant | Description |
|---|---|
| Supplementary Grants | Presented when authorised grants fall short |
| Additional Grant | Granted for unexpected expenses during current FY |
| Excess Grant | Granted when expense exceed the amount granted for service |
| Vote of Credit | Granted for unforeseen demands on resources |
| Exceptional Grant | Granted for a special purpose |
| Token Grant | Granted when funds for new service are available through reappropriation |
| Votes on Account | Grants in advance for part of the FY |
The Constitutional Provision of Grants
The Constitution of India 1949 provides a legal framework for these supplementary, additional, or excess grants, votes on account, votes of credit, and exceptional grants. They are defined under Article 115, which deals with supplementary, additional, or excess grants, and Article 116, which pertains to votes on account, votes of credit, and exceptional grants. The same procedure applied to a regular budget is also applicable for the regulation of these grants.
Last Modified: February 6, 2024