Overview of Supplementary Demands for Grants (SDG)

Overview of Supplementary Demands for Grants (SDG)

Subject : Polity

Section: Parliament

1. Likely Allocations:
   • Additional allocation for fertilizer, food, fuel subsidy, and Rural Employment Guarantee Scheme expected in SDG.
   • Winter Session of Parliament (starting December 4) to witness SDG presentation.
2. Funding Sources:
   • Some funds allocated for subsidy and rural employment through the contingency fund, subject to parliamentary regularization.
   • Anticipation of additional allocation through SDG, but not a significant fresh cash outflow expected.
3. Increase in Expenses:
   • FY 24 Budget size exceeds ₹45 lakh crore, with over 47% spent in April-September.
   • Significant increase in capital expenditure; revenue expenditure on Fertilizer Subsidy and Urea Subsidy already high.
   • Cabinet approved over ₹22,000 crore additional expenditure, likely provisioned through SDG.
4. Potential Areas for Additional Allocation:
   • Petroleum subsidy may exceed budgeted ₹2,257 crore due to additional Ujjwala LPG scheme connections and increased subsidy for Ujjawala customers.
   • Demand for assistance from oil marketing companies facing a ₹200 price cut on each domestic LPG cylinder.
   • Possible allocation for the free food grains scheme.
   • Expected need for more funds for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS).

Supplementary Demands for Grants: Overview

1. Definition:
   • Supplementary Demands for Grants are necessary for government expenditure beyond the amount approved during the Budget session.

2.   Constitutional Provisions:

• Article 115:
  • Pertains to supplementary, additional, or excess grants.
• Article 116:
  • Pertains to Votes on Account, Votes of Credit, and exceptional grants.
• Articles 115 and 116 cover Supplementary, Additional, or Excess Grants, and Votes on Account, Votes of Credit, and Exceptional Grants, respectively.

3. Procedure:
   • When approved grants fall short, an estimate for Supplementary or Additional grants is presented to and passed by Parliament before the fiscal year-end.
   • If actual expenditure exceeds approved grants, the Ministry of Finance presents a Demand for Excess Grant.
   • The Comptroller and Auditor General of India highlights excesses to Parliament.
   • The Public Accounts Committee reviews excesses and provides recommendations.
   • Demand for Excess Grants is presented after the fiscal year-end.

Other Types of Grants:

• Additional Grant:
  • Granted for additional expenditure on a new service not in the budget for the current fiscal year.
• Excess Grant:
  • Granted when spending on any service exceeds the allocated budget amount.
  • Voted by Lok Sabha after the fiscal year, following approval by the Public Accounts Committee.
• Vote of Credit:
  • Granted to meet an unexpected demand on India’s resources with no specific details.
  • Functions like a blank cheque given by Lok Sabha to the Executive.
• Exceptional Grant:
  • Granted for a special purpose unrelated to the current service of any fiscal year.
• Token Grant:
  • Granted when funds for new service expenditure can be made available by reappropriation.
  • A token sum (Re 1) demand is submitted to Lok Sabha; if approved, funds become available.
  • Reappropriation involves transferring funds between budget heads without additional expenditure.

Nutrient-Based Fertilizer Subsidy:

• A subsidy provided for fertilizers based on their nutrient content rather than a flat subsidy for all fertilizers.
• Intended to promote balanced use of fertilizers and improve soil fertility.
• Implementation:
  • The subsidy is calculated based on the nutrient content of the fertilizers, such as nitrogen, phosphorus, and potassium.
  • Farmers receive subsidies to make fertilizers more affordable and encourage judicious use.

Urea Subsidy:

• Urea is a crucial nitrogenous fertilizer.
• Urea subsidy involves financial support to ensure its availability at an affordable price for farmers.
• Implementation:
  • The government provides a subsidy to fertilizer manufacturers, making urea accessible to farmers at lower prices.
  • Aims to support agricultural productivity and address farmers’ concerns about fertilizer costs.

Mahatma Gandhi National Rural Employment Guarantee Act (NREGA):

• Objective:
  • Guaranteeing at least 100 days of wage employment in rural areas to every household whose adult members volunteer to do unskilled manual work.
• Implementation:
  • Provides a social safety net by ensuring livelihood security.
  • Focuses on sustainable development through the creation of productive assets in rural areas.

Ujjwala LPG Scheme:

• Objective:
  • To provide clean cooking fuel (LPG) to women from Below Poverty Line (BPL) households.
• Implementation:
  • Subsidized LPG connections are provided to eligible BPL women.
  • Aims to reduce indoor air pollution, health risks, and time spent on collecting traditional fuels.