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Indian Economy

Supplementary Grants

  • 29 Nov 2019
  • 5 min read

Why in News

Finance Minister tabled the first batch of Supplementary Demands for Grants for the financial year 2019-20 in both the Houses of Parliament.

Supplementary Grants

  • When the authorised grants fall short of the required expenditure, an estimate is presented before the Parliament for Supplementary or Additional grants.
    • The Comptroller and Auditor General of India bring such excesses to the notice of the Parliament.
    • The Public Accounts Committee examines these excesses and gives recommendations to the Parliament.
    • These grants are presented and passed by the Parliament before the end of the financial year (1st April to 31st March).

Other Grants

Additional Grant

  • It is granted when a need has arisen during the current financial year for additional expenditure upon some new service not contemplated in the budget for that year. E.g.:
    • The demand for grants for the year 2019-20 also includes allocation of more than Rs 8,000 crore to the newly formed Union Territories of Jammu and Kashmir and Ladakh and Rs 20 crore for upkeep of Ayodhya.

Excess Grant

  • It is granted when money has been spent on any service during a financial year in excess of the amount granted for that service in the budget for that year.
    • It is voted by the Lok Sabha after the financial year (since it is regulated by the same procedure which is applicable in the case of a regular budget, i.e. voted by the Lok Sabha).
    • Before the demands for excess grants are submitted to the Lok Sabha for voting, they must be approved by the Public Accounts Committee of Parliament.

Vote of Credit

  • It is granted for meeting an unexpected demand upon resources of India, when on account of the magnitude or the indefinite character of the service, the demand cannot be stated with the details ordinarily given in a budget.
    • Hence, it is like a blank cheque given to the Executive by the Lok Sabha.

Exceptional Grant

  • It is granted for a special purpose and forms no part of the current service of any financial year.

Token Grant

  • It is granted when funds to meet the proposed expenditure on a new service can be made available by reappropriation.
  • A demand for the grant of a token sum (of Re 1) is submitted to the vote of the Lok Sabha and if assented, funds are made available.
  • Reappropriation involves transfer of funds from one head to another. It does not involve any additional expenditure.

Votes on Account

  • The Constitution has authorised the Lok Sabha to make any grant in advance in respect to the estimated expenditure for a part of the financial year, pending the completion of the voting of the demands for grants and the enactment of the appropriation bill. This provision is known as the ‘vote on account’.
    • It is passed (or granted) after the general discussion on budget is over. It is generally granted for two months for an amount equivalent to one-sixth of the total estimation.

Note: Supplementary, additional, excess, exceptional grants and vote of credit are regulated by the same procedure which is applicable in the case of a regular budget.

Constitutional Provision

  • Supplementary, additional or excess grants and Votes on account, votes of credit and exceptional grants are defined in the Constitution of India 1949.
  • Provisions under these Articles are:
    • Article 115: Supplementary, additional or excess grants.
    • Article 116: Votes on account, votes of credit and exceptional grants.

Source: IE

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