Union Budget 2024 | What are Supplementary Grants?

Supplementary Grants are necessary when the authorized funds are insufficient to meet the current expenditure or when a need arises for spending on new services not contemplated in the budget for that year.

The Union Budget 2024 is on February 1, and in that light here is a look at what Supplementary Grants are.

Supplementary Grants refer to additional grant amounts sought by the government during a financial year, over and above the amounts already authorized in the budget. They are necessary when the authorized funds are insufficient to meet the current expenditure or when a need arises for spending on new services not contemplated in the budget for that year.

Here's an overview:

Purpose: Supplementary Grants are primarily required to meet expenses that cannot be deferred until the next financial year and were not foreseen when the original budget was formulated.

Process: The need for supplementary grants typically arises after the main budget has been passed. The government presents these additional demands to the Parliament. They must be approved by the Lok Sabha, the lower house of Parliament, which has the power to approve or reject such demands.

Types of Supplementary Grants:

Additional Grant: Sought 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.

Excess Grant: Requested when money has been spent on any service in excess of the amount granted for that service in the budget. This is usually presented after the financial year has ended and after the accounts for the year have been finalized.

Token Grant: Sought when funds to meet proposed expenditure on a new service can be made available by reappropriation from the savings under other grants, and the amount required is less than Rs 100. This grant is more of a procedural requirement to comply with the rules that no amount can be spent without the Parliament's approval.

Parliamentary Control: Supplementary Grants are an essential aspect of financial accountability and Parliamentary control over public expenditure. The Parliament scrutinizes these additional demands to ensure that the funds are necessary and are used efficiently.

Budgetary Impact: These grants can have implications on the fiscal deficit. If the supplementary demands lead to a significant increase in expenditure, they might affect the government's deficit targets and overall fiscal management.

Frequency: The need for supplementary grants can arise multiple times during a financial year, and they are usually presented with the monsoon and winter sessions of the Parliament.

Supplementary Grants are a crucial mechanism in the Indian budgetary process, allowing the government to meet unforeseen expenses and ensuring that public services continue uninterrupted. They reflect the dynamic nature of government finances and the need for flexibility in budget management.

(Disclaimer: This copy has been written by a generative AI tool and has been reviewed and edited by the DH Web Desk)