Is it OK for graduate students to draft the research proposal for their advisor’s funding application (like NIH’s or NSF’s grant application)? Is it appropriate (I type 'common' in the original post)for graduate students to draft the research proposal for their advisor’s funding application (like NIH’s or NSF’s grant application) ?


in the field of Biomedical research.
major grant proposal, like NIH's or NSF's)
Is this behavior allowed? Although it is OK and somewhat common for graduate students to draft grant proposal in our country, I'm not sure the situation in US or Canada. I do not know if I should write this thing in the personal statement for PhD application.
In experimental fields, this is not exactly a routine practice, but it is not rare either.  Especially in a sizable lab with a large number of graduate students, multiple grants are needed to support all the work going on.  It takes a substantial amount of time to prepare a grant proposal, and most proposals are not funded, so working to get grants can be a major drain on a PI's time.  If a graduate student can do some of the work, that may be the most efficient use of laboratory resources.

And an experience graduate student is likely to be the person with the best practical understanding of what precisely they are doing in the lab.  The student should understand the significance and the challenges of what they are planning to study further, and including that specific knowledge can help to make the best case for funding a proposal.  That being said, I would not expect a student two write an entire proposal (including all the parts of the proposal describing logistics and budgeting), nor would I expect their discussion of the research aspect to be used without substantial editing by the PI.

Moreover, regardless of what career path they eventually take, it will be important for the students to be able to explain cogently what they are working on and why it is important.  Having a student write a draft describing the research they want to undertake may be a good way of teaching these skills.