The Lok Sabha, India’s lower house of Parliament, has recently approved the supplementary demand for grants for the second batch (2020-2021). This decision is significant, as a supplementary grant is required when the funds authorized by Parliament through an Appropriation Act for a specific service in the current financial year turn out to be insufficient. Therefore, the approval of this grant is crucial to maintain appropriate funding levels for necessary services.
Understanding the Need for Supplementary Grants
The concept of supplementary grants is legislated under Constitutional Provision Article 115. This article governs the process of attaining additional or excess funding if a service requires more monetary resources than initially allotted in the budget for a particular fiscal year. It is vital that these grants are presented and passed by the Parliament before the end of the fiscal year.
Different Types of Grants
Apart from supplementary grants, the government has several other types of grants to cater to different requirements.
Firstly, an Additional Grant is implemented when a new service not considered in the budget for the current financial year requires extra expenditure.
An Excess Grant, on the other hand, is provided when any service’s expenses during a fiscal year surpass the amount allocated for that service in the budget for that year. However, it is only granted following the fiscal year, and upon approval by the Public Accounts Committee of Parliament.
The Role of Vote of Credit and Exceptional Grant
A Vote of Credit is utilized for satisfying an unanticipated financial demand that cannot be detailed sufficiently in a regular budget due to its large scale or indefinite nature. Thus, the Lok Sabha delivers a blank cheque to the Executive through this grant in order to meet this unexpected demand.
An Exceptional Grant is provided for a special purpose and does not comprise part of a particular fiscal year’s current service.
Token Grant and Reappropriation
A Token Grant is offered when the projected expenditure on a new service can be catered to by reappropriation. This involves shifting funds from one account to another, eradicating the need for additional expenditure. A demand for a token sum (of Re 1) is presented to the Lok Sabha for voting, and if approved, the necessary funds are transferred accordingly.
The Regulatory Constitution Article
Article 116 of the Indian Constitution pertains to Votes on Account, Votes of Credit, and Exceptional Grants along with Supplementary, Additional, and Excess Grants. Their regulation is governed by the same procedure applicable to a regular budget, ensuring that the appropriations remain under parliamentary control.
The recent approval of supplementary demand for grants by the Lok Sabha reinforces the importance of these different types of grants in managing the country’s financial obligations towards various services. The process guided by the constitution ensures that every potential expenditure is scrutinized, evaluated, and approved by the Parliament before implementation.
Last Modified: February 11, 2024