Actual Article
Article 206: Votes on account, votes of credit and exceptional grants
- Notwithstanding anything in the foregoing provisions of this Chapter, the Legislative Assembly of a State shall have the 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 204 for the voting of such grant and the passing of the law in accordance with the provisions of Article 205 in relation to that expenditure;
- (b) to make a grant for meeting an unexpected demand upon the resources of the State 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;
- The Governor of a State may authorize expenditure from the Consolidated Fund of the State pending the sanction of such expenditure by the Legislative Assembly.
UPSC Notes for Article 206
Explanation:
- Provisions for Financial Flexibility: Article 206 allows the Legislative Assembly to approve various types of financial grants that ensure the government can continue functioning effectively even when regular budget processes are incomplete. These include votes on account, votes of credit, and exceptional grants.
- Votes on Account: This mechanism enables the Assembly to grant funds for part of the financial year, ensuring that the government continues to operate while the budget is finalized.
- Votes of Credit: These are granted for unforeseen expenses that cannot be accurately predicted in advance, allowing the government to manage unexpected financial demands.
- Exceptional Grants: These are made for specific purposes that are outside the regular financial services of the year, providing funding for unique or one-time events.
- Governor’s Authorization for Expenditure: The Governor can authorize expenditures in advance of the Assembly’s approval, which is critical in maintaining continuity of government operations.
Key Points:
- Ensuring Continuous Government Operations: These provisions ensure that the government does not halt due to procedural delays in budget approvals or unexpected financial needs.
- Legislative Oversight: Despite these flexibilities, the legislative process retains oversight by eventually requiring Assembly approval for these expenditures.
Important Cases and Commissions Related to Article 206
Cases:
- No specific landmark cases interpreting Article 206 have been noted, as it deals with routine state financial operations.
Commissions:
- Administrative Reforms Commission: Might have explored ways to enhance fiscal responsibility and efficiency in handling unexpected or urgent state expenditures.
Important Reports Related to Article 206:
- Law Commission Reports: Could provide recommendations on improving legislative frameworks to handle financial emergencies and procedural delays more effectively.
Previous Year Prelims Questions Related to Article 206
- (UPSC Prelims 2016) What is the purpose of votes on account as per Article 206?
- A. To approve new taxes
- B. To provide funds pending the annual budget’s approval
- C. To redistribute funds between departments
- D. To increase the salary of the Governor Correct Answer: B. To provide funds pending the annual budget’s approval
- (UPSC Prelims 2018) What allows the Legislative Assembly to make grants for unforeseen expenditures?
- A. Votes of credit
- B. Exceptional grants
- C. Supplementary grants
- D. All of the above Correct Answer: A. Votes of credit
Previous Year Mains Questions Related to Article 206
- Mains 2016: “Analyze the significance of the financial provisions in Article 206 for maintaining the functionality of state governments during fiscal uncertainties.”
- Mains 2019: “Evaluate the roles of votes on account, votes of credit, and exceptional grants in state financial management as outlined in Article 206.”
Additional Insights:
- Financial Prudence and Preparedness: Article 206 underscores the importance of financial prudence and preparedness, allowing state governments to adapt to both predictable and unforeseen financial circumstances.
- Balancing Flexibility with Accountability: The article balances the need for financial flexibility with the imperative for legislative accountability, ensuring that even urgent and exceptional expenditures are subjected to legislative scrutiny.
Understanding Article 206 is crucial for UPSC aspirants as it details the mechanisms for managing state finances outside the regular annual budget process, emphasizing the safeguards and procedures for handling fiscal anomalies and emergencies. This knowledge is essential for both preliminary and main examinations, providing a comprehensive understanding of fiscal management within state governments.