The government recently tabled a third batch of Supplementary Demands for Grants in Lok Sabha. The concept of Supplementary Demand for Grants stems from the situations where the sum authorised by the Parliament through the appropriation act for specific service during the current financial year is inadequate. Therefore, additional grants become essential to meet the requirements of that year. Such grants are presented and passed by the Parliament before the conclusion of the fiscal year.
Additional Varieties of Grants
Apart from Supplementary Demand for Grants, there are other types of grants that the Government may necessitate under different circumstances. These include Additional, Excess, Vote of Credit, Exceptional, and Token Grants.
An Additional Grant gets set in place when a need arises for extra expenses on a new service not considered in the yearly budget. An Excess Grant implements when a service incurs expenditure beyond the granted amount in the annual budget. This grant is approved by the Lok Sabha after the end of the financial year, pending approval from the Public Accounts Committee of Parliament.
Vote of Credit is another type of grant extended during unexpected demands upon Indian resources where the demand cannot be detailed as in a regular budget. It is essentially a blank cheque given to the Executive by the Lok Sabha.
Exceptional Grants are designed for unique purposes and do not form part of any financial year’s service. Lastly, a Token Grant operates when proposed expenditure on a new service can be accommodated by reappropriation. A nominal sum demand is submitted to the Lok Sabha, and if approved, funds become available. This process involves the transfer of funds from one head to another without invoking additional expenditure.
Constitutional Provisions Related to Grants
The constitution has adequately provided for the regulation of these grants. Article 115 pertains to supplementary, additional, or excess grants. In contrast, Article 116 of the Constitution is about Votes on account, Votes of credit, and exceptional grants. Procedures for supplementary, additional, excess and exceptional grants, and vote of credit are regulated by the same rules applicable to a regular budget.
A Look at Previous Year Questions on Parliamentary Control over Public Finance
In previous years, candidates have been asked various questions around the methods of Parliamentary control over public finance in India. One such question from 2012 focused on aspects including Annual Financial Statement before the Parliament, withdrawal of money from the Consolidated Fund of India after passing the Appropriation Bill, provisions of supplementary grants and vote-on-account, reviews of Government’s programmes, and the introduction of Finance Bill in the Parliament.
Another statement-based question in 2015 tested the candidate’s knowledge about the powers of the Rajya Sabha concerning Money Bills, voting on Demands for Grants, and discussing the Annual Financial Statement. Such questions help assess the depth of understanding about the financial control exerted by the Parliament, the Appropriation Act, and the different types of grants.
Last Modified: February 15, 2024