Supplementary Demands for Grants

/ Current Affairs
  • The Centre has sought Parliament approval for a gross additional expenditure of ₹2.35 lakh crore, including ₹20,000 crore for recapitalisation of public sector banks, for 2020-21.
  • Finance Minister tabled the first batch of Supplementary Demands for Grants for this financial year in the Lok Sabha.
  • The biggest chunk goes towards the State governments, including ₹44,340 crore in post-devolution revenue deficit grants, and ₹2,262 crore as grants-in-aid for the State Disaster Response Funds, in accordance with the interim recommendations of the 15th Finance Commission.
  • The other large allocation is for the ₹40,000 crore additional funding promised to the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme.
  • The additional funds, which take the scheme’s budget for the year up to ₹1 lakh crore, were announced as a highlight of the Aatmanirbhar package.
  • The Department of Financial Services has included a sum of ₹20,000 crore “for meeting expenditure towards recapitalisation of public sector banks through issue of government securities”.
  • The Centre had not allocated any funds for bank recapitalisation in this year’s Budget.

       ‘Supplementary Grants’

Definition: The additional grant required to meet the required expenditure of the government is called Supplementary Grants.

Description: When grants, authorised by the Parliament, fall short of the required expenditure, an estimate is presented before the Parliament for Supplementary or Additional grants.

  • These grants are presented and passed by the Parliament before the end of the financial year.
  • When actual expenditure incurred exceeds the approved grants of the Parliament, the Ministry of Finance and Ministry of Railways presents a Demand for Excess Grant.
  • The Comptroller and Auditor General of India bring such excesses to the notice of the Parliament.
  • The Public Accounts Committee examines these excesses and gives recommendations to the Parliament.
  • The Demand for Excess Grants is made after the actual expenditure is incurred and is presented to the Parliament after the end of the financial year in which the expenses were made.