Article 116 of Indian Constitution: Votes on account, votes of credit and exceptional grants

Article 116 of the Indian Constitution

Intro: Article 116 of Indian Constitution is related to the parliamentary financial system, specifically focusing on the provision for supplementary, additional, or excess grants. This article empowers the Lok Sabha, upon the President’s recommendation, to authorize expenditures that were not accounted for in the annual financial statement or have exceeded the amount previously sanctioned. It ensures financial flexibility within the governance framework, allowing the government to meet unforeseen expenses and maintain fiscal management without legislative stalemate.

Original Text of Article 116 of Indian Constitution

(1) Notwithstanding anything in the foregoing provisions of this Chapter, the House of the People shall have power—

  • to make any grant in advance in respect of the estimated expenditure for a part of any financial year pending the completion of the procedure prescribed in article 113 for the voting of such grant and the passing of the law in accordance with the provisions of article 114 in relation to that expenditure;
  • to make a grant for meeting an unexpected demand upon the 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 an annual financial statement;
  • to make an exceptional grant which forms no part of the current service of any financial year, and Parliament shall have power to authorise by law the withdrawal of moneys from the Consolidated Fund of India for the purposes for which the said grants are made.

(2) The provisions of articles 113 and 114 shall have effect in relation to the making of any grant under clause (1) and to any law to be made under that clause as they have effect in relation to the making of a grant with regard to any expenditure mentioned in the annual financial statement and the law to be made for the authorisation of appropriation of moneys out of the Consolidated Fund of India to meet such expenditure.

Article 116 of Indian Constitution Explanation:

In order to understand Supplementary, additional and excess grants, we must first understand what the demand for the grant is.

In order to perform any expenditure (apart from the charged expenditure), the government has to first “demand for” the grant of money from the Consolidated Fund of India. The Parliament approves this demand; only then can the government spend money from the consolidated fund. This is done in three steps during each Budget:

Step 1: The Government puts a Demand for Grant

Step 2: These demands are introduced in the Parliament as Appropriation bills

Step 3: If passed by the Lok Sabha, these “Appropriation Acts” enable the government to appropriate the said amount out of the consolidated fund.

Now, suppose the government needs to introduce a new expenditure in the middle of a financial year that it forgot to put in the Budget during the start of the financial year. It would be impractical to present a full budget again to consider just a few demands for grants.

For such a situation, the constitution allows the Parliament to provide the following grants types of grants:

  1. Supplementary Grant
  2. Additional Grant
  3. Excess Grant
  4. Token Grant
  5. Exceptional Grants
  6. Vote of credit
  7. Vote on Account
For your information
Article 115 talks about supplementary, additional and excess grants. Article 116 talks about Votes on account, votes of credit and exceptional grants.

Grants mentioned in Article 116 of Indian Constitution:

  1. Exceptional Grants: If a completely new service is to be introduced by the government outside the Budget, the Parliament is empowered to pass an exceptional Grant.
  2. Vote of credit: It is granted to meet some unexpected demands, which, due to their indefinite character, cannot be stated in detail. It is considered a blank cheque given to the executive. It could be a part of an ‘interim Budget’.
  3. Vote on Account: It is granted when the government requires an advance sum for part of a financial year (say for 2-3 months) before the appropriation act is passed by the Parliament. For example, the demand for grants and the appropriation act take around two months to be passed by the Parliament. If the government want to run the ministries according to the new Budget, the Parliament can pass a ‘Vote on Account’ so that the government can function for the time being.

In order to appropriate money using the vote on account, vote on credit or exceptional grants, the procedure to be followed shall be the same as in the case of any other demand for grand and appropriation act. This is because no money can be appropriated out of India’s consolidated fund without Parliamentary authorisation via a law.

Note: No amendment has ever been made in this article.

For Further Reference:

Read the constitution of India.

Read the Budget in Parliament.

Other Related Links:

Indian Constitution: All Articles and schedules Article 1 of Indian Constitution
Article 2 of Indian ConstitutionArticle 3 of Indian Constitution
Article 4 of indian ConstitutionArticle 5 of Indian Constitution
Fundamental RightsDPSP
Fundamental DutiesAmendments of the Indian Constitution
Article 115 of Indian ConstitutionArticle 117 of Indian Constitution

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