Demand for Grants is the formal request for funds made by various ministries or departments of the government. Article 113 of the Indian Constitution says no demand for a grant shall be made except on the recommendation of the President. These demands need to be submitted in the form of Demands for Grants. This article explains the topic Demand for Grants in the Parliament which is an important topic under the Polity and Governance Syllabus of the UPSC examination.

Demand for Grants

• Article 113 of the Constitution mandates that the estimates of expenditure from the Consolidated Fund of India included in the Annual Financial Statement and required to be voted by the Lok Sabha are submitted in the form of Demands for Grants.
• The Demands for Grants are presented to the Lok Sabha along with the Annual Financial Statement.
• Generally, one Demand for Grant is presented with respect to each Ministry or Department. Large ministries can submit multiple Demands.
• In case of Union Territories without Legislature, a separate Demand is presented for each of the Union Territories.
• Each Demand first gives the totals of ‘voted’ and ‘charged’ expenditure. Revenue and ‘capital’ expenditure are separately included in the demand. Also the grand total of the amount of expenditure for which the Demand is presented. Is mentioned.
• This is followed by the estimates of expenditure under different major heads of account. The breakup of the expenditure under each major head between ‘Plan’ and ‘Non-Plan’ is also given.
• Each Demand normally includes the total provisions required for a service, that is, provisions on account of revenue expenditure, capital expenditure, grants to State and Union Territory Governments and also loans and advances relating to the service.

Constitutional Provisions about Demand for Grants

Voting on Demands for Grants

• As per the reports of the departmental standing committees, The Lok Sabha takes up voting of demands for grants.
• Voting on Demands for Grants is an exclusive privilege of the Lok Sabha. Rajya Sabha has no power of voting on demands for grants.
• Voting is confined to only the votable part of the budget, expenditures charged on the Consolidated Fund of India is not submitted to the vote.
• Each demand is voted separately by the Lok Sabha. During this stage, the budget is discussed thoroughly.

Cut Motions

• Various motions are used to scrutinise the demands for grants. Such motions are called as ‘cut motion’. They are of three types.

1. Policy Cut Motion: This motion is moved to oppose a specific policy of the government. It states that the amount be reduced to 1Rupee. When a policy cut motion is adopted, it signifies that the House does not agree with the policy proposed by the government.
2. Economy Cut Motion: An economy cut motion is moved to reduce the amount of demand presented by the government in the budget or reduction of items in the demand. It implies that the amount proposed in the demand is considered excessive or unnecessary.
3. Token Cut Motion: A token cut motion is moved to register a specific grievance. It does not seek to reduce the amount of demand but is aimed at drawing the attention of the government to a particular issue or concern. It states that the amount of the demand be reduced by 100 rupees.

• Cut Motion upholds the principle of responsible government by probing the activities of the government. Their passage by Lok Sabha questions the parliamentary confidence in the government and may lead to its resignation.
• On the last day of the allocated days, the Speaker puts all the remaining demands to vote and disposes them even without discussion. This is called as ‘guillotine’.

Other Grants

• Article 115 of the Constitution allows Parliament to provide for supplementary, additional, or excess grants for government expenditure during the financial year beyond what was originally budgeted.

Supplementary Grants

A supplementary grant is granted when the amount authorized by the Parliament through the appropriation act for a particular service for the current financial year is found to be insufficient for that year.

Additional Grants

It is granted when the need has arisen during the current financial year for additional expenditure upon some new service not contemplated in the budget for that year.

Excess Grants

• Excess grant 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. Before submitting such grant for voting in Lok Sabha, it must be approved by the Public Account Committee.

Vote of Credit

• It is granted 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 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. 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 the transfer of funds from one head to another.

Conclusion

The demand for grants is an essential aspect of fiscal planning and governance. It serves as a mechanism for ensuring transparency, accountability, and effectiveness in the allocation of public funds. Through the demand for grants, governments can prioritize expenditure, address key socio-economic challenges, and meet the needs of their citizens

FAQs

MCQs

1. What is the significance of Demand for Grants in the Union Budget?

A) It is the final step in passing the budget
B) It outlines the estimated receipts of the government
C) It presents the estimated expenditure of ministries
D) It allows the withdrawal of funds from the Consolidated Fund

2. Which house of the Parliament has the power to approve or reject Demands for Grants?

A) Lok Sabha
B) Rajya Sabha
C) Both Lok Sabha and Rajya Sabha
D) The President

3. What happens after the Demand for Grants is passed in the Parliament?

A) The Appropriation Bill is introduced
B) Funds are directly transferred to ministries
C) The government can utilize the funds without further approval
D) The Rajya Sabha votes on the demands

4. What is the role of the Public Accounts Committee concerning Demands for Grants?

A) It approves the funds for ministries
B) It oversees the execution of government projects
C) It audits the expenditure post-allocation
D) It suggests changes to the Demand for Grants

5. Which of the following allows the government to access funds temporarily if the full budget is not passed?

A) Appropriation Bill
B) Finance Bill
C) Vote on Account
D) Supplementary Grants

GS Mains Questions and Answers

Q1: Explain the importance of Demands for Grants in the Indian parliamentary system and their role in ensuring accountability.

Answer: Demands for Grants are an essential part of the parliamentary budgetary process, where each ministry presents its estimated expenditure for the upcoming financial year. These demands are scrutinized by members of Parliament, ensuring that the allocation of resources is aligned with the government’s priorities. They also offer a platform for MPs to question the government on its fiscal policies and spending, thus enhancing transparency and accountability.

Once the Demand for Grants is approved, the government is held accountable for ensuring that the allocated funds are used efficiently and for the intended purposes. The Public Accounts Committee further audits the expenditure to prevent misuse of funds, reinforcing the checks and balances in the Indian democratic system.

Q2: What is the significance of the Appropriation Bill in the context of Demands for Grants, and how does it facilitate government spending?

Answer: The Appropriation Bill is the legislative mechanism that authorizes the government to withdraw funds from the Consolidated Fund of India to meet its financial requirements, as outlined in the Demands for Grants. Once the Lok Sabha approves the Demands for Grants, the Appropriation Bill is introduced and passed to legalize government spending.

The bill ensures that funds are withdrawn only for purposes approved by Parliament, maintaining fiscal discipline and transparency. Without the passage of the Appropriation Bill, the government cannot spend any money from the Consolidated Fund, highlighting its critical role in public finance management.

Q3: Discuss the challenges associated with the Demand for Grants process in the Indian Parliament and suggest reforms to improve its effectiveness.

Answer: The Demand for Grants process, while crucial, faces several challenges. One significant issue is the limited time available for the detailed discussion of demands, leading to many ministries' demands being passed without adequate scrutiny. Additionally, the complexity of budget documents makes it difficult for many MPs to fully understand and analyze the demands, reducing the effectiveness of parliamentary oversight.

To address these challenges, reforms such as increasing the duration of budget sessions and enhancing the capacity of MPs through specialized training in public finance could be implemented. Moreover, involving expert committees to provide detailed analysis on the demands could further strengthen the oversight function of Parliament.

Previous Year Questions on Demand for Grants

1. UPSC CSE Prelims 2018:

Question: Which of the following is required for the government to withdraw funds from the Consolidated Fund of India?

A) Finance Bill
B) Appropriation Bill
C) Vote on Account
D) Demand for Grants

Answer: B

Explanation: The Appropriation Bill is necessary for the withdrawal of funds from the Consolidated Fund of India. It is passed after the Demand for Grants is approved and authorizes the government to use the funds for specific purposes.

2. UPSC CSE Mains 2019 (GS Paper 2):

Question: "The process of Demand for Grants plays a pivotal role in parliamentary control over public finance." Discuss.

Answer: The Demand for Grants process is a crucial mechanism for maintaining parliamentary control over public finance. Through this process, ministries and departments present their budgetary requirements to the Parliament, which scrutinizes and approves them. This ensures that public funds are allocated efficiently and transparently. The discussions on Demands for Grants also offer an opportunity for MPs to hold the government accountable for its fiscal policies, question the rationale behind specific allocations, and suggest modifications to ensure better governance.

By enabling Parliament to approve, modify, or reject budgetary proposals, the Demand for Grants process enhances fiscal responsibility and accountability, ensuring that the government’s expenditure aligns with public interests and policy objectives.

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