Part VI - The States • Article

Article 205 Simplified: Supplementary, additional or excess grants

Article 205 is the 'Budget Revision' mechanism for State finances. If during the financial year a department needs more money than was approved, or a new service arises that wasn't in the original budget, or a department has already overspent, the Governor must lay a supplementary/additional statement or excess demand before the legislature. The same rules as the original budget (Articles 202, 203, 204) apply to these supplementary demands—they require Assembly approval and an Appropriation Bill.

Official Text

(1) The Governor shall— (a) if the amount authorised by any law made in accordance with the provisions of article 204 to be expended for a particular service for the current financial year is found to be insufficient for the purposes of that year or when a need has arisen during the current financial year for supplementary or additional expenditure upon some new service not contemplated in the annual financial statement for that year; or (b) if any money has been spent on any service during a financial year in excess of the amount granted for that service and for that year, cause to be laid before the House or the Houses of the Legislature of the State another statement showing the estimated amount of that expenditure or cause to be presented to the Legislative Assembly of the State a demand for such excess, as the case may be. (2) The provisions of articles 202, 203 and 204 shall have effect in relation to any such statement and expenditure or demand and also to any law to be made authorising the appropriation of moneys out of the Consolidated Fund of the State to meet such expenditure or the grant in respect of such demand as they have effect in relation to the annual financial statement and the expenditure mentioned therein or to a demand for a grant and the law to be made for the authorisation of appropriation of moneys out of the Consolidated Fund of the State to meet such expenditure or grant.

Simple Meaning

Explain Like Ten

Imagine the State Budget is a shopping list made at the start of the year. But what if prices go up, or a flood happens, or the government forgot something important? Article 205 lets the government go back to the Assembly and say 'we need more money for this' or 'we already spent more than approved—please approve it now.' The same strict rules as the original budget apply—the Assembly must vote on it.

Student Mode

Article 205 mirrors Article 115 (Union supplementary/excess grants). Three triggers: (1) Approved amount for a service proves insufficient; (2) New service arises that wasn't in the original budget; (3) A service has already overspent its sanctioned amount (Excess Grant). All three require the same procedure as the original budget—statement before the legislature, Assembly approval of demands, and an Appropriation Act. The CAG (Comptroller and Auditor General) typically identifies overspending for retrospective Excess Grants.

Example

During the year, a Tamil Nadu district faces unexpected floods. The government needs ₹500 crore for disaster relief, which was not budgeted. Under Article 205, the Governor presents a Supplementary Demand for Grant to the Assembly. Once approved, the relief funds can be legally released. If the Public Works Department overspent ₹100 crore on road contracts, an Excess Grant demand is presented and approved retrospectively.

Key Takeaway

Article 205 ensures mid-year financial surprises are handled constitutionally—no extra or unbudgeted spending is allowed without legislative approval.

FAQs

What is the difference between a Supplementary Grant and an Excess Grant?

A Supplementary Grant is sought prospectively when funds are predicted to fall short. An Excess Grant is sought retrospectively after money has already been spent beyond the approved amount. Both require Assembly approval under Article 205.

Who typically identifies excess expenditure that leads to an Excess Grant demand?

The Comptroller and Auditor General (CAG) audits State accounts and identifies overspending. The Public Accounts Committee then examines these. The government subsequently seeks Assembly approval through an Excess Grant.

Quiz

Under Article 205, a Supplementary Grant is needed when:

Answer: The approved amount is insufficient or a new service not in the original budget arises

Which constitutional officer typically identifies overspending that leads to an Excess Grant demand under Article 205?

Answer: The Comptroller and Auditor General