Part V - Parliament • Article

Article 116 Simplified: Votes on account, votes of credit and exceptional grants

Passing the full Budget takes time (usually until April or May). But the government needs money to pay salaries and keep things running from April 1st. Article 116 allows the Lok Sabha to give the government some 'advance money' (usually for 2 months) to keep the lights on until the full Budget is passed. This is called a Vote on Account.

Official Text

(1) Notwithstanding anything in the foregoing provisions of this Chapter, the House of the People shall have power— (a) to make any grant in advance in respect of the estimated expenditure for a part of any financial year pending the completion of the procedure prescribed in article 113 for the voting of such grant and the passing of the law in accordance with the provisions of article 114 in relation to that expenditure; (b) to make a grant for meeting an unexpected demand upon the resources of India when on account of the magnitude or the indefinite character of the service the demand cannot be stated with the details ordinarily given in an annual financial statement; (c) to make an exceptional grant which forms no part of the current service of any financial year, and Parliament shall have power to authorise by law the withdrawal of moneys from the Consolidated Fund of India for the purposes for which the said grants are made. (2) The provisions of articles 113 and 114 shall have effect in relation to the making of any grant under clause (1) and to any law to be made under that clause as they have effect in relation to the making of a grant with regard to any expenditure mentioned in the annual financial statement and the law to be made for the authorisation of appropriation of moneys out of the Consolidated Fund of India to meet such expenditure.

Simple Meaning

Explain Like Ten

Normally, passing the budget takes months. To prevent the government from running out of money on April 1st while they are still talking, Parliament can give them some 'advance pocket money' for a couple of months. This is called a Vote on Account.

Student Mode

Article 116 provides flexibility in public finance: (1) Vote on Account: an advance grant given to the government to cover expenses for a part of the year (normally 2 months, equivalent to 1/6th of estimates) pending budget passage. (2) Vote of Credit: given for meeting unexpected, massive demands (like war or national emergencies) where details cannot be specified in the budget (often called a 'blank cheque'). (3) Exceptional Grant: for a special purpose that is not part of the ordinary services of the year.

Example

In a general election year, the government passes a 'Vote on Account' under Article 116 to secure advance funds to cover administrative salaries and basic public expenses for the first few months until the new government is formed and presents the full Budget.

Key Takeaway

Provides 'Advance Money' to the government to keep working while the Budget is being debated.

FAQs

Why is a 'Vote on Account' necessary?

The financial year begins on April 1, but the budget is voted on and passed later (May). Without a Vote on Account, the government would have no legal authority to withdraw money for salaries and operations in April and May.

What is a 'Vote of Credit'?

It is a grant made to the executive for meeting an unexpected demand of indefinite character (e.g., during national security emergencies), where the details cannot be itemized in the budget. It acts like a blank cheque.

How does an Interim Budget differ from a Vote on Account?

A Vote on Account only deals with the expenditure side (withdrawing advance funds). An Interim Budget (often presented in election years) includes both receipts (taxes) and expenditure estimates for the transition period.

Quiz

An advance grant made by the Lok Sabha pending the passage of the budget is called:

Answer: Vote on Account

Which grant acts as a 'blank cheque' for meeting unexpected, massive national security or emergency demands?

Answer: Vote of Credit