What happens if the State needs more funds than the amount presented in the Financial Statement earlier?
Article 205 of the Indian Constitution describes the circumstances under which the Governor must present additional financial grants or demands for funds to the Legislature, and specifies that certain provisions apply to these situations.
These provisions outline the process for authorizing the use of funds from the State’s Consolidated Fund to meet additional or unexpected expenses and ensure that the House or Houses of the Legislature of the State are informed of and have the opportunity to approve such expenditures.
But under what provisions can they present another statement before the Assembly? Continue reading to find out.
- Article 205 Of The Indian Constitution – Supplementary, Additional, or Excess Grants
- FAQs Related To Article 205 Of The Indian Constitution
Article 205 Of The Indian Constitution – Supplementary, Additional, or Excess Grants
In Article 205 of the Indian Constitution, we will learn about the extra funds sanctioned to the Ministries in the form of Supplementary, Additional, or Excess Grants and under what circumstances.
Let’s take a closer look at the clauses for a better understanding.
Clause 1 – As it is & Explained
(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.
The first clause of Article 205 of the Indian Constitution explains the responsibilities of the Governor with respect to financial management within a state. It is the responsibility of the Governor to ensure that the Legislature is informed of any additional or unexpected financial needs that may arise during the course of a financial year.
If the amount of money granted to a State for a particular service is insufficient for the purposes of that year, or if there is a need for supplementary or additional expenditure on a new service not originally planned for in the annual financial statement, it is required to present a statement before the Legislature showing the estimated amount of this additional expenditure.
Similarly, if any money has been spent on a purpose in excess of the amount granted for that year, the Governor must present a demand for this excess amount to the Legislative Assembly.
Clause 2 – As it is & Explained
(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.
In the second clause of Article 205 of the Indian Constitution, we further learn that the provisions under articles 202, 203, and 204 related to the annual financial statement and the expenditure mentioned therein, will also apply in these circumstances.
You may also like to read:
- Article 202 Of The Indian Constitution
- Article 203 Of The Indian Constitution
- Article 204 Of The Indian Constitution
To conclude what we learned from Article 205 of the Indian Constitution:
- There may be situations when the money sanctioned to a State is insufficient due to the occurrence of an unexpected and unavoidable expenditure. In these cases, a new statement to grant more funds for additional expenditures must be presented before the Legislative Assembly which shall be then debated upon.
- The extra funds are sanctioned to the Ministries in the form of Supplementary Grants or Additional/Excess Grants, depending on the purpose.
- The provisions of articles 202, 203, and 204 apply to these statements and expenditures or demands, as well as to any laws that authorize the appropriation of funds from the Consolidated Fund of the State to meet such expenditure or grant.
FAQs Related To Article 205 Of The Indian Constitution
Which part of the Constitution does Article 205 belong to?
Article 205 belongs to Part VI of the Indian Constitution which is called “The States”.
What are Supplementary Grants?
Supplementary Grants are the ones demanded when a particular amount is sanctioned for a defined purpose but turn out to be insufficient.
What are Additional or Excess Grants?
When a particular amount of money is sanctioned for a specific purpose but an extra or related purpose is added, or in the case where an extra amount is spent on the same purpose, the demand for more funds is called an Additional or Excess Grant.