Actual Article
Article 116: Votes on account, votes of credit and exceptional grants
- Votes on Account:
- Notwithstanding anything in the foregoing provisions of this Chapter, the House of the People shall have power 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.
- Votes of Credit:
- The House of the People shall have power to make any 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.
- Exceptional Grants:
- The House of the People shall have power to make grants in advance in respect of the estimated expenditure for a part of any financial year, not included in the annual financial statement.
- Provisions Relating to the Above:
- The provisions of Articles 113 and 114 shall have effect in relation to the making of any grant under this Article.
UPSC Notes for Article 116
Explanation:
- Votes on Account:
- Allows Parliament to make a grant in advance for part of the financial year to meet expenditure needs before the full budget is passed. This ensures continuity in government operations.
- Votes of Credit:
- Allows Parliament to grant funds to meet unexpected demands of significant magnitude or indefinite nature, which cannot be detailed in the annual financial statement.
- Exceptional Grants:
- Allows Parliament to make grants for expenditures not included in the annual financial statement, ensuring flexibility to address unforeseen needs.
- Procedural Consistency:
- The procedures for these grants follow the provisions outlined in Articles 113 (procedure in Parliament with respect to estimates) and 114 (appropriation bills).
Key Points:
- Ensuring Continuity: Votes on Account ensure that government functions are not disrupted due to delays in passing the annual budget.
- Emergency Funding: Votes of Credit provide a mechanism to address unexpected financial demands swiftly.
- Flexibility: Exceptional Grants allow for financial flexibility to meet unforeseen expenditures not anticipated in the annual financial statement.
- Legislative Control: All these grants require parliamentary approval, maintaining legislative oversight over public finances.
Important Cases and Commissions Related to Article 116
Cases:
- Subramanian Swamy vs. Union of India (2016): Emphasized the need for legislative oversight and transparency in financial matters, indirectly reinforcing the principles of Article 116.
- S.R. Bommai vs. Union of India (1994): Highlighted the importance of legislative control over financial decisions, applicable to the provisions of emergency and exceptional grants.
Commissions:
- Sarkaria Commission: Discussed the importance of Centre-State financial relations and the need for mechanisms to address unforeseen financial demands.
- National Commission to Review the Working of the Constitution (NCRWC) (2002): Suggested reforms to enhance financial management and ensure effective legislative oversight.
Previous Year Prelims Questions Related to Article 116
- (UPSC Prelims 2017) Votes on Account are used to:
- A. Meet unexpected demands upon the resources of India
- B. Make grants for expenditures not included in the annual financial statement
- C. Provide grants in advance pending the completion of budgetary procedures
- D. Approve excess expenditure over the authorized amount Correct Answer: C. Provide grants in advance pending the completion of budgetary procedures
- (UPSC Prelims 2018) Which of the following allows Parliament to meet an unexpected demand upon the resources of India?
- A. Vote on Account
- B. Vote of Credit
- C. Exceptional Grant
- D. Contingency Fund Correct Answer: B. Vote of Credit
Previous Year Mains Questions Related to Article 116
- Mains 2016: “Discuss the significance of Votes on Account, Votes of Credit, and Exceptional Grants in the financial administration of India as outlined in Article 116. How do these provisions ensure financial flexibility and legislative oversight?”
- Mains 2019: “Analyze the role of Parliament in managing unforeseen financial demands through the provisions of Article 116. How do these provisions balance the need for flexibility and accountability in public finance management?”
Additional Insights:
- Financial Flexibility: Article 116 provides mechanisms for the government to manage finances flexibly while ensuring legislative control and oversight.
- Timely Response: The provisions allow for a timely response to financial needs and emergencies, maintaining government operations and addressing unforeseen expenditures.
- Balancing Control and Flexibility: Ensures that while the government has the flexibility to manage finances efficiently, all expenditures are subject to parliamentary approval, maintaining transparency and accountability.
Understanding Article 116 is crucial for UPSC aspirants as it outlines the mechanisms for managing financial grants to ensure continuity, address emergencies, and meet unforeseen expenditures. This knowledge is essential for both preliminary and main examinations, offering a comprehensive understanding of the constitutional provisions that govern financial management within India’s parliamentary system.