Article 116 of the Constitution of India provides for three special forms of grants that enable the Lok Sabha to authorise expenditure in circumstances where the ordinary annual financial procedure under Articles 112 to 114 is not sufficient or cannot conveniently be completed.
- Meaning of Article 116
- Article 116(1): Three Special Grants
- Article 116(1)(a): Vote on Account
- Vote on Account and Annual Budget
- Vote on Account and Appropriation
- How Long Does a Vote on Account Last?
- Article 116(1)(b): Vote of Credit
- Key Features of Vote of Credit
- Vote of Credit and Emergency Situations
- Article 116(1)(c): Exceptional Grant
- What Does “No Part of the Current Service” Mean?
- Exceptional Grant vs Vote on Account
- Article 116(1): Lok Sabha’s Power
- Parliament’s Power to Authorise Withdrawal
- Article 116(2): Application of Articles 113 and 114
- Article 116 and Article 112
- Article 116 and Article 113
- Article 116 and Article 114
- Article 116 and Article 115
- Article 116 and Article 114(3)
- Three Types of Grants Under Article 116
- Comparison Table
- Important Distinctions
- Common Confusions
- Article at a Glance
- Quick Revision
- Conclusion
The three constitutional mechanisms are:
- Vote on account
- Vote of credit
- Exceptional grant
Article 116 also provides that Parliament may authorise withdrawal of money from the Consolidated Fund of India for the purposes for which these grants are made. The detailed constitutional procedure for making these grants and authorising the corresponding appropriation is linked to Articles 113 and 114. (Legislative Assembly)
Meaning of Article 116
The ordinary financial procedure requires the Annual Financial Statement to be presented under Article 112, demands for grants to be considered under Article 113 and appropriation to be authorised under Article 114.
However, situations may arise where:
- the financial year has begun but the full budgetary procedure has not yet been completed;
- an unexpected and potentially large or indefinite demand arises; or
- Parliament needs to authorise expenditure for a special purpose that is not part of the ordinary current services of a financial year.
Article 116 provides constitutional mechanisms for these situations.
The three grants have distinct purposes:
| Grant | Purpose |
|---|---|
| Vote on account | Advance grant for part of a financial year pending completion of the ordinary budget procedure |
| Vote of credit | Grant for an unexpected demand when its details cannot ordinarily be stated because of its magnitude or indefinite character |
| Exceptional grant | Grant for a special purpose that forms no part of the current service of any financial year |
Article 116(1): Three Special Grants
Article 116(1) begins with a non obstante clause: “Notwithstanding anything in the foregoing provisions of this Chapter”.
This means that the House of the People has the power to make these grants notwithstanding the ordinary financial provisions appearing earlier in the chapter.
The three powers are contained in sub-clauses (a), (b) and (c).
Article 116(1)(a): Vote on Account
A vote on account is a grant made in advance in respect of the estimated expenditure for a part of a financial year.
It is used while the ordinary procedure under Article 113 for voting on grants and the appropriation procedure under Article 114 are still pending.
The constitutional purpose is therefore to ensure continuity of government expenditure during the period between the beginning of a financial year and completion of the full budgetary process.
Why Is a Vote on Account Necessary?
The financial year begins on 1 April, but the complete parliamentary process for considering the Annual Financial Statement, voting on demands for grants and passing the Appropriation Act may take time.
The government nevertheless needs funds to continue its ordinary activities.
A vote on account provides temporary financial authority for this period.
Key Features
A vote on account:
- is an advance grant;
- relates to estimated expenditure;
- covers only part of the financial year;
- operates while the Article 113 and Article 114 procedures are pending; and
- is made by the Lok Sabha.
It is therefore a temporary bridge until the regular financial procedure is completed.
Vote on Account and Annual Budget
A vote on account should not be confused with the Annual Financial Statement.
Annual Financial Statement
Article 112 presents the estimated receipts and expenditure for the financial year.
Vote on Account
Article 116 allows expenditure for a part of the financial year to be authorised in advance while the complete grant and appropriation process is pending.
Thus:
Annual Financial Statement → overall annual estimates
Vote on Account → temporary advance financial authorisation
Vote on Account and Appropriation
A vote on account is not itself the same thing as the ordinary annual appropriation process.
Article 116 expressly contemplates that the vote on account operates pending:
- completion of the procedure under Article 113; and
- passing of the law under Article 114 relating to the expenditure.
This makes the temporary character of the mechanism constitutionally clear.
How Long Does a Vote on Account Last?
Article 116 itself does not prescribe a fixed number of months or a fixed percentage of annual expenditure.
The duration and amount are determined through the parliamentary process and the relevant financial legislation.
In practice, a vote on account is generally used to meet expenditure for a limited period until the regular budgetary procedure is completed.
Therefore, the common description of a vote on account as covering a particular number of months should not be treated as a constitutional requirement contained in Article 116.
Article 116(1)(b): Vote of Credit
A vote of credit is a grant for meeting an unexpected demand upon the resources of India.
However, the constitutional provision contains an important additional requirement.
The demand must be such that, because of the:
- magnitude, or
- indefinite character
of the service,
the demand cannot be stated with the details ordinarily given in an Annual Financial Statement.
Thus, a vote of credit is designed for exceptional circumstances where the government faces an unexpected financial requirement of such scale or uncertainty that the expenditure cannot be presented with the normal degree of detail.
Key Features of Vote of Credit
A vote of credit involves:
- an unexpected demand;
- a demand upon the resources of India;
- a service whose magnitude or indefinite character makes detailed estimation impracticable; and
- a grant by the Lok Sabha.
The emphasis is therefore on unexpected expenditure combined with insufficiently determinable detail.
Vote of Credit and Emergency Situations
A vote of credit is commonly associated with extraordinary or emergency financial situations where the government cannot provide the level of detailed estimates normally expected in an Annual Financial Statement.
However, Article 116 itself does not use the word “war” or restrict the vote of credit to war.
Therefore, it is more accurate to use the constitutional formulation:
unexpected demand + magnitude or indefinite character + inability to state ordinary details
rather than treating war as a mandatory constitutional condition.
Article 116(1)(c): Exceptional Grant
An exceptional grant is a grant that:
forms no part of the current service of any financial year.
The key feature is that the expenditure is for a special purpose that is outside the ordinary current services of the financial year.
Unlike a vote on account, it is not merely temporary financing pending completion of the budgetary process.
Unlike a vote of credit, it is not defined by an unexpected demand whose magnitude or indefinite character prevents ordinary detailed presentation.
What Does “No Part of the Current Service” Mean?
The expression indicates that the expenditure is for a purpose that does not form part of the ordinary ongoing services of the financial year.
An exceptional grant therefore addresses a distinct and special expenditure purpose rather than routine annual expenditure.
Exceptional Grant vs Vote on Account
These mechanisms serve very different purposes.
| Vote on Account | Exceptional Grant |
|---|---|
| Temporary advance | Special-purpose grant |
| Covers part of a financial year | Not part of the current service of any financial year |
| Used pending ordinary budget procedure | Not merely a temporary bridge |
| Concerns estimated expenditure | Concerns an exceptional purpose |
Article 116(1): Lok Sabha’s Power
Article 116 expressly gives the House of the People the power to make all three types of grants.
Therefore, the constitutional voting authority under Article 116 lies with the Lok Sabha.
This follows the broader constitutional principle under Article 113 that the House of the People exercises the decisive voting role over expenditure requiring grants.
Parliament’s Power to Authorise Withdrawal
Article 116(1) also provides that Parliament shall have power to authorise by law the withdrawal of moneys from the Consolidated Fund of India for the purposes for which these grants are made.
Therefore, the grant and the legal authority to withdraw money are related but distinct stages.
The constitutional structure is:
Special grant under Article 116
↓
Law authorising withdrawal
↓
Withdrawal from Consolidated Fund of India
Article 116(2): Application of Articles 113 and 114
Article 116(2) provides that the provisions of Articles 113 and 114 apply to:
- the making of a grant under Article 116(1); and
- the law to be made authorising withdrawal of money from the Consolidated Fund for that grant,
in the same manner as they apply to ordinary grants and appropriation, subject to the necessary constitutional context.
This means that the special grants under Article 116 do not exist outside parliamentary financial control.
They remain connected with:
- the procedure for grants under Article 113; and
- appropriation under Article 114.
Article 116 and Article 112
Article 112 establishes the Annual Financial Statement.
Article 116 provides special mechanisms where the ordinary annual financial process needs to be supplemented or temporarily bypassed in the constitutionally permitted manner.
The distinction is:
Article 112 → ordinary annual estimates
Article 116 → special grants for specified circumstances
Article 116 and Article 113
Article 113 deals with the normal procedure for demands for grants.
Article 116(2) provides that Article 113 applies to grants made under Article 116, with the necessary constitutional application.
The Lok Sabha therefore remains central to the grant-making process.
Article 116 and Article 114
Article 114 deals with Appropriation Bills.
Article 116(2) applies Article 114 to the laws authorising appropriation for grants under Article 116.
Therefore, special grants still require the appropriate legal authority for withdrawal from the Consolidated Fund.
Article 116 and Article 115
Article 115 deals with:
- supplementary grants;
- additional grants; and
- excess grants.
Article 116 deals with a different set of circumstances.
Article 115
Deals with situations such as:
- an existing appropriation proving insufficient;
- a new service arising during the financial year; or
- expenditure already exceeding the amount granted.
Article 116
Deals with:
- advance expenditure pending completion of the normal process;
- unexpected demands of magnitude or indefinite character; and
- exceptional expenditure outside the current service of a financial year.
Article 116 and Article 114(3)
Article 114(3) provides the general rule that money cannot be withdrawn from the Consolidated Fund except under appropriation made by law, subject to Articles 115 and 116.
Article 116 is therefore expressly recognised as one of the constitutional provisions operating alongside the ordinary appropriation rule.
Three Types of Grants Under Article 116
1. Vote on Account
Purpose: Temporary advance for expenditure for part of a financial year while the normal budget process is pending.
Key phrase: “grant in advance”
2. Vote of Credit
Purpose: Unexpected demand where the magnitude or indefinite character of the service prevents ordinary detailed estimation.
Key phrase: “unexpected demand”
3. Exceptional Grant
Purpose: Special expenditure that forms no part of the current service of any financial year.
Key phrase: “no part of the current service”
Comparison Table
| Point | Vote on Account | Vote of Credit | Exceptional Grant |
|---|---|---|---|
| Article | 116(1)(a) | 116(1)(b) | 116(1)(c) |
| Main purpose | Temporary advance | Unexpected demand | Special-purpose expenditure |
| Timing | Pending normal budget process | When unexpected demand arises | For expenditure outside current service |
| Nature | Advance | Exceptional and difficult to detail | Exceptional |
| Detailed estimates ordinarily possible? | Yes, but ordinary process is pending | No, because of magnitude or indefinite character | Not relevant to its defining condition |
| Connection with current annual services | Covers part of current financial year | May concern an unexpected demand | Specifically forms no part of current service |
| Who makes grant? | Lok Sabha | Lok Sabha | Lok Sabha |
Important Distinctions
Vote on account vs vote of credit
A vote on account is primarily about timing: the ordinary financial procedure is not yet complete.
A vote of credit is primarily about the nature and uncertainty of the demand: the demand is unexpected and its magnitude or indefinite character prevents the ordinary level of detail.
Vote of credit vs exceptional grant
A vote of credit deals with an unexpected demand upon the resources of India where the service cannot be stated with ordinary detail.
An exceptional grant is for a purpose that forms no part of the current service of any financial year.
Vote on account vs supplementary grant
A vote on account provides advance authority for expenditure for part of a financial year while the ordinary procedure is pending.
A supplementary grant is sought where the amount already authorised for an existing service is insufficient.
Exceptional grant vs additional grant
An additional grant under Article 115 concerns a new service not contemplated in the Annual Financial Statement for that year.
An exceptional grant under Article 116 is a grant for a purpose that forms no part of the current service of any financial year.
The constitutional formulations are distinct and should not be merged.
Grant vs appropriation
A grant authorises expenditure through the parliamentary grant process.
Appropriation provides the legal authority to withdraw money from the Consolidated Fund.
Article 116 expressly connects the two stages.
Common Confusions
What is a vote on account?
A vote on account is an advance grant for estimated expenditure for part of a financial year, pending completion of the normal grant and appropriation procedure.
Is a vote on account the same as the Annual Financial Statement?
No.
The Annual Financial Statement under Article 112 contains the estimated receipts and expenditure for the financial year. A vote on account provides temporary advance financial authority while the normal process is pending.
Does the Constitution specify that a vote on account must be for two or three months?
No.
Article 116 does not prescribe a fixed duration. The duration and amount are determined through the applicable parliamentary and financial process.
What is a vote of credit?
It is a grant for an unexpected demand upon the resources of India where, because of the magnitude or indefinite character of the service, the demand cannot be stated with the details ordinarily given in an Annual Financial Statement.
Is a vote of credit constitutionally limited to war?
No.
Article 116 does not expressly restrict it to war. The constitutional test is the unexpected nature of the demand and the inability to provide ordinary detailed estimates because of its magnitude or indefinite character.
What is an exceptional grant?
It is a grant that forms no part of the current service of any financial year.
Who makes the grants under Article 116?
The House of the People (Lok Sabha) has the power to make the grants.
Does a grant under Article 116 itself permit withdrawal from the Consolidated Fund?
The Constitution separately provides that Parliament may authorise by law the withdrawal of money from the Consolidated Fund for the purposes of the grants. Article 116(2) applies the appropriation framework of Article 114.
Is a vote on account the same as an exceptional grant?
No.
A vote on account is a temporary advance pending the ordinary budgetary process. An exceptional grant is for a purpose that forms no part of the current service of any financial year.
Is a vote of credit the same as a supplementary grant?
No.
A supplementary grant addresses an insufficiency in an existing appropriation. A vote of credit addresses an unexpected demand whose magnitude or indefinite character prevents ordinary detailed presentation.
Does Article 116 eliminate parliamentary control over special expenditure?
No.
Article 116 itself provides for parliamentary grants and requires the application of Articles 113 and 114 to the relevant grant and appropriation process.
Article at a Glance
| Point | Position |
|---|---|
| Article | Article 116 |
| Subject | Votes on account, votes of credit and exceptional grants |
| Granting House | Lok Sabha |
| Clause (1)(a) | Vote on account |
| Vote on account | Advance grant for part of financial year pending normal procedure |
| Clause (1)(b) | Vote of credit |
| Vote of credit | Unexpected demand whose magnitude or indefinite character prevents ordinary detailed statement |
| Clause (1)(c) | Exceptional grant |
| Exceptional grant | Grant forming no part of current service of any financial year |
| Withdrawal from Consolidated Fund | Requires authorisation by law |
| Article 113 | Applies to making of grants |
| Article 114 | Applies to appropriation |
| Related Article | Article 112, 113, 114, 115 |
Quick Revision
- Article 116 deals with vote on account, vote of credit and exceptional grants.
- The Lok Sabha has the power to make these grants.
- Vote on account [Article 116(1)(a)]:
- grant in advance;
- relates to estimated expenditure for part of a financial year;
- used while the Article 113 and Article 114 procedures are pending.
- Vote of credit [Article 116(1)(b)]:
- meets an unexpected demand upon the resources of India;
- applies where the magnitude or indefinite character of the service prevents ordinary detailed presentation.
- Exceptional grant [Article 116(1)(c)]:
- is for a purpose that forms no part of the current service of any financial year.
- Parliament may authorise by law withdrawal from the Consolidated Fund of India for these grants.
- Article 116(2) applies Articles 113 and 114 to the grants and corresponding appropriation.
- Article 112 → Annual Financial Statement.
- Article 113 → procedure regarding estimates and demands for grants.
- Article 114 → Appropriation Bills.
- Article 115 → supplementary, additional and excess grants.
- Article 116 → vote on account, vote of credit and exceptional grants.
- Do not confuse:
- Vote on account → temporary advance
- Vote of credit → unexpected, large/indefinite demand
- Exceptional grant → expenditure outside current service
Conclusion
Article 116 provides flexibility within the constitutional system of parliamentary financial control. A vote on account prevents disruption of government functioning while the regular budgetary procedure is pending; a vote of credit addresses unexpected demands whose magnitude or indefinite character makes ordinary detailed estimation impracticable; and an exceptional grant provides for expenditure that forms no part of the current service of any financial year. Despite their special nature, these grants remain connected to the parliamentary grant and appropriation procedures through Articles 113 and 114.
