Excess grant

Topic: Government Budget, Fiscal Policy and FRBM · NCERT: Beyond NCERT

Meaning

An excess grant regularises money that a ministry has already spent beyond the amount Parliament granted for a financial year. It comes under Article 115(1)(b). The process runs in this order:

1. The CAG (Comptroller and Auditor General) reports the overspending.
2. The Public Accounts Committee (PAC) of Parliament examines it.
3. The Lok Sabha then votes to approve it.

This keeps Parliament in control, because even overspending must be approved by Parliament after the fact.

Example

Suppose a ministry was granted ₹500 crore but spent ₹520 crore. The CAG flags the extra ₹20 crore in its audit. The PAC examines why it happened, and the Lok Sabha then passes an excess grant for the ₹20 crore.

Don't confuse with

• Supplementary grant: this is sought during the year, before the extra money is spent, when the sanctioned amount proves too small. An excess grant comes after the money has already been overspent.

Related concepts

• Demand for grants
• Cut motion
• Guillotine
• Appropriation Bill
• Finance Bill
• Money Bill
• Vote on account
• Interim budget
• Supplementary grant
• Vote of credit

Read more

• Passing the budget: from demands for grants to the Finance Act