Budget 2021 | What is Demand for Grants?

Amid the coronavirus pandemic, Finance Minister Nirmala Sitharaman is set to present a crucial Budget, which will not only give projections about next one year but also about a decade that could reshape the economy post-pandemic.

With all eyes set on the Union Budget 2021, it is imperative for people to know the key terms associated with the annual exercise. One such term is Demands for Grants.

What is Demand for Grants?

Article 113 of the Constitution requires that any proposal or estimate seeking withdrawal of money from the Consolidated Fund of India should be presented to the Lok Sabha in the form of a Demand for Grants.

Demand for Grants is an expenditure estimate, including provisions related to revenue expenditure, capital expenditure, grants, that is expected to be incurred in the next financial year. Hence, every ministry puts forth its own Demand for Grant and this is presented in the Lok Sabha as part of the Union Budget. It, however, cannot be presented without the President of India's prior approval.

"So much of the said estimates as relates to other expenditure shall be submitted in the form of demands for grants to the House of the People, and the House of the People shall have power to assent, or to refuse to assent, to any demand, or to assent to any demand subject to a reduction of the amount specified therein." - Article 113(ii), Constitution of India

What comprises Demand for Grants?

The Demand for Grants includes charged and voted expenditure. Interest on loan and other such payments are considered a part of the charged expenditure and this is not voted on in the Lok Sabha. Voted expenditure include capital and revenue expenditure. Expenditure on government programs and schemes are considered a part of voted expenditure.

The document also includes details of capital expenditure and revenue expenditure. It further provides a breaks up of expenditure such as aid given to states and UTs, loans, advances, and provisions for each scheme and program of the ministry.

Usually, one Demand for Grants is submitted by each ministry or department, however, large ministries can submit multiple Demand for Grants.

The Lok Sabha retains the power to give or deny assent and reduce the requested amount under a particular scheme.