Supplementary Demands for Grants are requests for additional funding that are made before the end of the fiscal year, while Excess Demands for Grants are made after a financial year has ended to appropriate funds for expenditures that exceeded the original budget allocation. Excess Demands allow flexibility for unexpected needs but have also been criticized as undermining legislative control over public spending. Both Supplementary and Excess Demands follow the same parliamentary approval process as the main budget.

1. ResearchAssignment
Name: Sahar Saqib
Intern, Legal Department PIPS. 13.06.14
Q. What is the difference between Supplementary Demands for Grants and Excess Demands for
Grants?
Supplementary Demands for Grants are those demands which fall outside the scope of the
Budget established for a financial year. Those supplementary grants and appropriations may be
presented to and need to be approved by the National Assembly1.
When the authorized expenditure amount of a fiscal year is found to be insufficient for the current
financial year for a supplementary or excess expenditure required for a service not
contemplated in the Budget of that year, the President may give a statement to both Houses of
Parliament giving an estimate of that supplementary or excess expenditure.
Whenever the government feels that the grant given for a particular service is not sufficient for
the purposes in the given financial year or when it proposes to undertake a service that is not
contemplated in the Budget, the government presents demands for supplementary grants for the
approval of the legislature.
The Supplementary Demands for Grants are presented to and passed by the House before the
end of the financial year while the demands for Excess Grants are made after the expenditure
has actually been incurred and after the financial year to which it relates, has expired.
As an example, on Tuesday June 3rd 2013, the Minister for Finance, Revenue, Economic
Affairs, Statistics and Privatization Senator Ishaq Dar presented the supplementary demands for
Grants and Appropriations for the financial year 2013-2014 in the National Assembly2.
Excess Demands for Grants, on the other hand, are raised when money has been spent on any
service during a financial year in excess of the amount granted for that service in that year. During
discussion on Excess Demands for Grants, members of Parliament can point out how money has
been spent unnecessarily or that it ought not to have been spent. However, for Supplementary
1 ‘The Budgetary Process’
http://164.100.47.132/LssNew/abstract/process.htm
2
Business Recorder,“National Assembly approves 121 supplementary demands for grants,
appropriations”
http://www.brecorder.com/business-and-economy/189:pakistan/1204532:national-assembly-approves-
121-supplementary-demands-for-grants-appropriations

2. Demands of Grants, the discussion is confined to the items constituting the same and no
discussion can be raised on the original grants nor on the policy underlying them.
All cases involving Excess Demands for Grants are brought to the notice of Parliament by the
Auditor General through his report on the Appropriation Accounts. The excesses are then
examined by the Public Accounts Committee which makes recommendations regarding their
regularization in its report to the House.
Supplementary and Excess Grants are regulated by the same procedure as is applicable in the
case of demands for grants of the main Budget subject to such adaptations, whether by way of
modification, addition or omission, as the Speaker deems necessary or expedient.
Q. How are Excess Demands of Grants appropriated?
Grants for Excess Demands may be appropriated for either developmental or non-developmental
expenditures. Developmental expenditures would include social and community services and
economic services, among others. These are negotiable, unlike non-developmental expenditures
which must remain constant and cannot be compromised. Such non-development expenditures
include pay for employees, administrative services, defense and general services3.
Once the Parliamentary House passes the demands for grants, a Bill is introduced to
provide for the appropriation or allocation of the funds required to meet those grants,
which include Excess demands for Grants. Once the Bill is introduced, it will be considered
and passed, and the expenditure will be provided out of the Consolidated Fund.
The introduction of such a Bill cannot be opposed. The scope of discussion is limited to
matters of public importance or administrative policy implied in the grants covered by the Bill
and which have not already been raised during the discussion on demands for grants. The
Speaker may require members desiring to take part in the discussion to give advance
intimation of the specific points they intend to raise and may withhold permission for raising such
points which in his opinion are simply repeated demands for grants.
No amendment can be proposed to an Appropriation Bill which will have the effect of varying
the amount or altering the destination of any grant so made, or of varying the amount of any
expenditure charged on the Consolidated Fund, and the decision of the Speaker as to
whether such an amendment is admissible is final. An amendment to an Appropriation Bill for
omission of a demand voted by the House is out of order. In other respects, the procedure in
respect of an Appropriation Bill is the same as in respect of other Money Bills.
3 ‘Difference between Developmental Expenditure and Non-Developmental Expenditure’
http://www.shareyouressays.com/113693/difference-between-developmental-expenditure-and-non-
development-expenditure

3. Q. What is the importance of Excess Demands for Grants in the Budget?
The crucial distinction between Excess Demands Grants and Supplementary Demands for Grants
comes into play when we assess their importance in the Budget respectively. Whereas
Supplementary Demands for Grants are decided before the financial year commences, Excess
Demands are discussed and grants are made after the expenditure has actually been incurred. It is
this aspect of Excess Demands which assists the economy by being a safety net and Plan B for
situations which could not have been predicted or anticipated for the coming fiscal year.
From a purely economic standpoint, we may consult Walras' Law, a revered principle in the
theory of general equilibrium4 which asserts that budget constraints imply that the values of
excess market demands (or conversely, excess market supplies) must sum to zero5. According to
this theory, there should never be a need for Excess Demands for Grants. However, in all
practicality the use and feasibility of this procedure has proved beneficial for those situations
where Budget constraints, inaccuracies in planning for the upcoming year and certain
unprecedented needs and demands may arise.
The most prolific feature of the Parliamentary system is the fact that the legislator has complete
control over the public purse. No tax can be levied or any amount of money spent without the
specific sanction of the legislature6.
However, former Chairman of the Public Accounts Committee of Parliament in India, Era
Sezhiyan, has criticized Excess Demands for Grants when they say, “The accumulation of
excesses in thousands of crores of rupees represents financial anarchy and the blatant repudiation
of the executive's accountability to the legislature. It is a fraud on the Constitution7.”
4
John Stuart Mill in his Essays on Some Unsettled Questions of Political Economy (1844) also expressed
this concept but in a less vigorously mathematical fashion.
5
Walra’s Law implies that the sum of the values of excess demands across all markets must equal zero,
whether or not the economy is in a general equilibrium. Therefore if positive excess demand exists in one
market, negative excess demand must exist in some other market. Thus, if all markets appear to be in
equilibrium then it is not possible for any market to be singled out of the equilibrium.
6 E. Sezhiyan, ‘The Anarchy of Excess Grants’
http://www.frontline.in/static/html/fl1922/stories/20021108002304500.htm
7
Ibid.