Supplementary grant

Indian Economy glossary

Also called: Additional grant · Topic: Government Budget, Fiscal Policy and FRBM · NCERT: Beyond NCERT

Meaning

A supplementary grant, also called an additional grant, is extra money that the government asks Parliament for during the financial year. It comes under Article 115. The government seeks it in two cases:

  • the amount already approved for a service turns out to be not enough;
  • a new service comes up that was not in the original budget.

The Lok Sabha must approve it before the extra money can be drawn. Supplementary demands are also how spending from the Contingency Fund is later paid back from the Consolidated Fund.

Example

Suppose fertiliser prices rise sharply mid-year and the subsidy set aside in the budget runs short. The government brings supplementary demands for grants to Parliament to get more money for fertiliser subsidy.

Don't confuse with

  • Excess grant: this approves money already spent beyond the grant, after the CAG and PAC have examined it. A supplementary grant is sought before the extra money is spent.
  • Vote of credit: this is used when the size or nature of a demand cannot be spelt out at all. A supplementary grant is for a known, stated amount.

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