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Learn the Additional Budgetary Powers (for UPSC CSE/IAS exam)
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This lesson discusses the difference in the real expenditure of the budget & how it differs from the assigned budget. The other concepts that are highlighted are supplementary,additional grants, excess grants and also the differences between the two are thrown light upon.

Bhavin Sangoi
BA Political Science and Psychology, Mumbai University. Teaching Polity, Economics and international relations for 7 years.

U
Unacademy user
Sir it will be helpful if you explain with example between additional grant and exceptional grant
vote of credit is made from consolidated fund of India or contingency fund of India? u gave an eg of disaster .
The difference between Exceptional grant and Vote of Credit is not clear. Can you please elaborate?
Bhavin Sangoi
4 years ago
Vote of credit is a kind of credit taken by government in the hour of need. For example, when terrorist intruded in Kargil India suddenly needed lots of money to buy smart bombs, shells for Bofors howitzers etc. In such condition government may take vote of credit, without giving proper details. Vote of credit is like a blank cheque. Because amount may or may not be stated in this, as sometimes even government doesn't know how much it will require. Exceptional grant on the other hand is given for a specific amount, but it forms 'no part of current service of any financial year'. Current service means, regular and recurring expenditure such as salary, electricity bill etc. That means here money is provided for one time need which has arisen due to some unusual situation, such as hijacking of IC 814, when terrorist demanded money and other terrorist captive in Indian jails.
Bhavin Sangoi
4 years ago
Continued.... Example of Kargil and IC 814 were given to just explain the point, no vote of credit or exceptional grant was taken during actual incidents. I hope this clarifies the difference. If you have any more queries feel free to ask.
Mohana Krishnan
4 years ago
@Bhavin Sangoi - Thanks for clarification. But you said Vote of credit applies to natural calamities like flood,earth quake. If PM has to release money from PM relief fund, does it need to go to parliment still for getting majority vote?
Bhavin Sangoi
3 years ago
@Mohan Krishnan - first of all, sorry for delayed comment as I didn't notice your comment. Yes Vote of Credit can be taken during national calamity, however PM relief fund has nothing to do with Vote of Credit. Because PMRF is under the custody of PM and is constituted by people's donation. Usually money isn't taken on vote of credit during natural calamity (although government can take it) because for that Contingency fund of India exists. Watch this https://unacademy.in/collection/gain-an-understanding-of-parliamentary-processes-instruments-by-bhavin-sangoi/LY5L2F7D
@BhavinSangoi sir by ur example it appears that vote of credit and exceptional grant both are needed in the need of hour.......not able to differentiate between two..
Bhavin Sangoi
3 years ago
Yes, both are mainly kept for the purpose of flexibility. The main difference between the two is that 'vote of credit' is a credit (borrowing) taken from treasury which will then have to be adjusted under any other grant. Whereas 'Exceptional grant' although used very sparingly but is like any other grant, where money is formally given for certain purpose. It's not a borrowing.
@BhavinSangoi....Thanks sir and sorry I didn't realise you have replied...Thank u once again
Rohi reddy
2 years ago
If any unforeseen conditions like war occurs money are taken from contingency fund of india not through vote of credit dear. Voye of credit is if govt want to introduce any scheme but dont know how much expenditure is needed then vote of credit is passed it is just like a blank cheque given to govt.but the govt should justifie where did it and how dis it used the fund
i have confusion b/w excess and supplimentary grants. if u can explain it with example of financial years....like sought in advance or at the end after expenditure made---i m not able to differenciate at all....kindly assist
Hemal Parikh
2 years ago
Supplementary grant is always associated with the same financial year. for Ex. i want to buy a umbrella and its costing is Rs. 100 at the time of budget preparation. Now Financial year start, i get the grant of Rs. 100 but when i go to market to buy umbrella its cost become Rs. 120. so my grant is insufficient to buy that umbrella. so i go to parliament to demand of Rs. 20 in same FY. this Rs. 20 is called Supplementary grant. it will be passed and totally it will become Rs. 120 and sufficient to me buy umbrella. Excess grant always come after ending of FY and preparation of accounts. for better understanding we take a one basic example Same illustration as above. i want to buy a umbrella of Rs. 120 but having Rs. 100 only. Still i buy it without sufficient grant. Now FY ends and accounts has been prepared by A G office. Records of A G office says that this head have rS. 100 and expenditure made of Rs. 120 here the difference of Rs. 20 has been made without the consent of Parliament. after two years of complement on of FY, Public Account Committee will ask the reasons for this excess expenditure. and after that on the recommendation of PAC a bill of excess grant of Rs. 20 will be introduced in parliament and it will passed in normal way.
very clear it is...according to mlaxmikant..but..only question is sir ...what is token grant??? please explain it sir... email id is ksn4393316@gmail.com ...please do reply ...and 1 more question ...there is very confusion in the...devices of parliamentary proceedings topic and...legislative procedures in parliament... please...explain these too...i m waiting...????..thanking you in anticipatation Respected Sir...your effort is wort ... i salute ????
  1. Course: Gain an understanding of Parliamentary Processes and Instruments Lesson: Additional Budgetary Powers Presented by Bhavin Sangoi


  2. About me . B.A in Political Science & Psychology . Appeared in UPSC CSE Mains Teaching Indian Polity, International Relations, economics & mental Ability since 5 years Experience of teaching for various competitive exams such as NTSE, CET & UPSC Follow me on: https://Unacademyin/user/BhavinSangoi


  3. Key points . According to article 115, the President shall lay another statement of estimates to seek Supplementary, additional or excess grants. . Supplementary grant: It is raised when the money provided in budget, for a service is found insufficient.


  4. Continued Additional grant: It is raised when an additional expenditure upon some 'new service', not contemplated in the Annual financial statement for that year arises. Esess erants i i raised when ny mny has been spent on any service during a financial year in excess of the amount granted for that service for that year


  5. Continued Supplementary, additional and excess grants are sought in same way as normal demand for grants. . However, first two grants are sought during the same financial year, and in advance of the actual expenditure. Whereas last grant is sought at the end of financial year, after the expenditure is actually made.


  6. Continued According to article 116 (1), House of People shall have power to make vote on account, vote of credit and exceptional grant.


  7. Vote on account . It is an advance given in respect of pending procedure for the passage of Appropriation bill. -Gemteraly vote on aecout is gmanted for the period of two months, but . Generally vote on account is granted for the period of two months, but in the year of General election it is granted for the period of up to four or five months. A government whose term will expire in the middle of the financial year, can't make budget for full financial year.


  8. Vote of credit . It is given to meet an unexpected demand upon the resources of It is given to meet an unexpected demand upon the resources of India when on account of the magnitude or the indefinite character of the service the demand can't be stated with the details ordinarily given in an annual financial statement. character of the servie the demand ean't be stated with the


  9. Exceptional grant . It doesn't form any part of current service of any financial year It is made for some particular and special purpose. In the history of Parliament of independent India this grant has never been sought