With respect to Government Budgeting in India, differentiate between (1) votes on account and votes of credit (2) Excess grant and Exceptional grant.
Vote-on-account- literally means a vote on the accounts of the government. During elections and till a new government takes over, the caretaker government needs funds for various routine items of expenditure — like staff salaries — without which there would be a financial crisis. According to the Constitution, the government cannot spend any money without Parliament’s approval. Hence, vote-on-account is taken whereby a government gets parliamentary approval to run the government for a few months, using funds drawn from the Consolidated Fund of India.
Vote of Credit – It is granted for meeting an unexpected demand upon the resources of India, due to the magnitude or the indefinite character of the service, the demand cannot be stated with the details ordinarily given in a budget. Hence, it is like a blank cheque given to the Executive by the Lok Sabha.
Excess Grant – It is granted when money has been spent on any service during a financial year in excess of the amount granted for that service in the budget for that year. Excess must be approved by the Public Accounts Committee of Parliament.
Exceptional Grant – It is granted for a special purpose and forms no part of the current service of any financial year.
Topics: GS-III: Government Budgeting