Supplementary demands for grants

A budget is an estimate made months before the money is spent, and estimates go wrong in two directions. Sometimes a department needs more than was voted for it; sometimes an entirely new service becomes necessary during the year. Neither can be paid for from the Consolidated Fund without fresh legislative authority, because no money may be withdrawn from it except under appropriation made by law. The supplementary budget is that fresh authorisation. For states, Article 205 of the Constitution provides for it, mirroring Article 115 at the Union level. Two features are worth noting. First, a supplementary budget adds to the original budget rather than replacing it, which is why Uttar Pradesh's total for the year rises from Rs 9.12 trillion to more than Rs 9.71 trillion. Second, the split between capital and revenue expenditure tells you what kind of demand arose: capital spending creates assets such as expressways and power infrastructure, revenue spending covers salaries, subsidies and maintenance. Here capital expenditure is more than twice the revenue component, which points to project financing rather than running costs.