DEMAND FOR GRANTS
1. Context
The Odisha government has proposed to amend the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 to ease the land acquisition process for various industrial and infrastructure projects.
With the amendment to the Central legislation, the Odisha government aims to do away with the mandatory provision of social impact assessment (SIA) study before the land acquisition, which it says is a time-consuming process.
2. About Demand for Grants
- It is a well-established principle among modern democracies that no money can be withdrawn from the exchequer of the country without the authority of law.
- Put simply, this means that any withdrawal or disbursement from the Consolidated Fund of India can only be done by passing a bill in the Lok Sabha.
3. Grants in Parliament
Article 113 of the Constitution requires that any proposal or estimate seeking the withdrawal of money from the Consolidated Fund of India should be presented to the Lok Sabha in the form of a demand for grants.
4. Demand for Grants proposed by Ministry
- Therefore, every ministry prepares a demand for grants for the expenditure to be incurred in the next financial year.
- These demands are collectively presented in the Lok Sabha as part of the Union Budget.
5. Demand for Grants includes
- The demand for grants includes both charged and voted expenditures.
- Charged expenditures are considered liabilities of the government of India such as payment of interest and are not put to vote in the Lok Sabha.
- The other category of expenditure is voted expenditure which includes revenue and capital expenditure to be incurred on a government scheme in the next financial year.
- Usually, there is a demand for which for each ministry, but large ministries like Finance and Defence have more than one demand for grants.
6. Preparing Demand for Grants
Each demand for a grant is prepared in two ways:
- First, it clearly distinguishes the charged expenditure and the voted expenditure.
- It also classifies expenditure as capital expenditure and revenue expenditure
- While capital expenditure results in the creation of some kind of assets for the government, revenue expenditures are operational.
In addition to giving the break-up charged and voted expenditure and revenue and capital expenditure, a demand for grants is a gross estimate of the total expenditure to be incurred.
Demand for grants also gives the following:
- Break-up of expenditure under different heads of account and
- Lists out the recoveries to be made from the scheme
- The net amount of expenditure, after deducting the recoveries is also shown.
Note that each demand for grants also includes:
- The total provisions required for a service or scheme, basically both revenue and capital expenditure
- Any assistance to be given to states and UTs
- Loans and advances related to that service or scheme
7. Powers of Lok Sabha in Demand for Grants
- Article 113 (iii) prescribes that no demand for grants can be presented in the Lok Sabha without the President of India's prior approval.
- Under Articles 117 and 274 of the Indian Constitution, a Presidential recommendation is also required for tabling a Money Bill in the Lok Sabha.
- The Finance Bill, accompanying the annual financial statement which is called the Union Budget, also carries a certificate issued by the President.
For Prelims & Mains
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For Prelims: Lok Sabha, Demand for Grants, President of India, Odisha, Article 113 (iii), 117 and 274, Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013,
For Mains:
1. What is the Demand for Grants? Discuss the constitutional provisions dealing with the Demand for Grants. (250 Words)
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Previous year questions
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1. Which of the following are the methods of Parliamentary control over public finance in India? (UPSC 2012)
Select the correct answer using the codes given below: (a) 1,2,3 and 5 only (b) 1,2 and 4 only (c) 3,4 and 5 only (d) 1,2,3,4, and 5 1. Answer: (a) 2. The authorization for the withdrawal of funds from the Consolidated fund of India must come from (UPSC 2011) (a) The president of India (b) The parliament of India (c) The prime minister of India (d) The union finance minister 2. Answer: (b) |
Source: The Financial Express
