What are demands for grants?

Summary of the Article: Demands for Grants in India

Demands for Grants are an essential part of the budget process in India. Each ministry or department presents one demand for a grant, except for some large ministries where multiple demands may be presented. Article 113 of the Indian Constitution mandates that the estimates of expenditure be submitted in the form of Demands for Grants, which must be voted on by the Lok Sabha. The Consolidated Fund of India, established by Article 266(1) of the Constitution, is the total of the government’s receipts and outlays, excluding unusual items. There are three types of demands for money: transaction demand, precautionary demand, and asset motive/speculative demand. Demand 16 in the budget pertains to Capital Appropriation, while Demands 1-15 pertain to Revenue Demand. Program/project grants are the most common type of grant, and the three main types of grants in aid offered by the government are discretionary grants, student loans or grants, and formula grants determined by Congress. Article 108 of the Indian Constitution deals with the joint sitting of the Parliament, presided over by the Speaker of the Lok Sabha or the Deputy Chairman of the Rajya Sabha. Grants given to the states under the recommendation of the Finance Commission include Discretionary Grants and Statutory Grants. The Consolidated Fund of India comprises the government’s revenues and expenses, excluding exceptional items. Lastly, the Consolidated Fund of India is used to pay for various government expenses.

Questions and Answers:

1. How many demands are included in the budget?
   Normally, one Demand is presented in respect of each Ministry/Department. In respect of some of the large Ministries/Departments, however, more than one Demand is presented.
2. How many demands for grants are there in India?
   Generally, one demand for a grant is presented in respect of each ministry or department.
3. What is Article 113 demands for grants in India?
   Article 113 of the Constitution mandates that the estimates of expenditure from the Consolidated Fund of India included in the Annual Financial Statement and required to be voted by the Lok Sabha be submitted in the form of Demands for Grants.
4. What is the Consolidated Fund of India?
   The Consolidated Fund of India refers to the total of the Government of India’s receipts from income tax, Customs, central excise, and other sources, as well as its outlays, minus unusual items. Article 266(1) of the Indian Constitution provided for its establishment.
5. What are the three demands for money?
   The types of demands for money are transaction demand, which is money needed to buy goods related to income, precautionary demand, which is money needed for financial emergencies, and asset motive/speculative demand, which is when people wish to hold money rather than buy assets/bonds/risky investments.
6. What is demand 16?
   Demands 1 to 15 pertains to Revenue Demand, and demand 16 pertains to Capital Appropriation. After the Demands for Grants are voted by Parliament, the Appropriation bill is introduced to provide for appropriation of money required to meet the expenditures.
7. What are the most common grants?
   Program/project grants are the most common type of grant. These grants specify that funding may only be used to support the program or project referenced in the proposal.
8. What are the three main types of grants in aid?
   The three main types of grants offered by the government are discretionary grants awarded through a competitive process, student loans or grants to help students attend college, and formula grants that use formulas determined by Congress and have no application process.
9. What does Article 108 of the Indian Constitution deal with?
   Article 108 deals with the joint sitting of the Parliament, called by the President of India and presided over by the Speaker of the Lok Sabha or, in their absence, by the Deputy Speaker of the Lok Sabha, or in their absence, the Deputy Chairman of the Rajya Sabha.
10. Which grants are given to the states under the recommendation of the Finance Commission?
    The provision of Discretionary Grants to states is made under Article 275 of the Constitution. The bases of Statutory Grants are recommendations of the Finance Commission.
11. What is the meaning of Consolidated Fund?
    The Consolidated Fund of India is the most important government account that includes revenues received by the government and expenses made by it, excluding exceptional items. It was constituted under Article 266(1) of the Constitution of India.
12. Who gets paid from the Consolidated Fund of India?
    Various government expenses are paid from the Consolidated Fund of India.