Budget Related Constitutional Provisions


Ajit Kumar AJIT KUMARWISDOM IAS, New Delhi.

Financial business in Parliament consists of the Budget comprising of General Budget and Railway Budget, Demands for Grant, Vote on Account, Supplementary Demands for Grant,
Appropriation Bill and the Finance Bill. The salient Constitutional provisions that shape and guide thebudgeting systems and process are outlined in brief as under-
 
Article 112- Annual Financial Statement
 
It provides that in respect of every financial year the President shall cause to be laid before both
the Houses of Parliament a statement of the estimated receipts and expenditure of the
Government of India for that year, referred to as the “annual financial statement’’. The estimates ofexpenditure shall show separately expenditure charged upon the Consolidated Fund of India; and other expenditure (voted) proposed to be made from the Consolidated Fund of India. The statement shall also distinguish expenditure on revenue account from other (capital) expenditure.
 
Article 113- Procedure in Parliament with respect to Estimates.
 
It provides that estimates relating to expenditure charged upon the Consolidated Fund of
India shall not be submitted to the vote of Parliament, even though these can be discussed in either House of Parliament. The estimates relating to the ‘voted’ portion shall be submitted in the form of demands for grants, and the House of the People shall have power to assent, refuse or reduce the amount specified therein. No demand for a grant shall be made except on the recommendation of the President.
 
Article 114- Appropriation Bills.
 
After the passing of the demands under Article 113, Appropriation Bill is introduced in the Lok
Sabha to provide for the appropriation out of the Consolidated Fund of India to meet the requirements relating to (a) the grants so made by the House of the People; and (b) the expenditure charged on the Consolidated Fund of India but not exceeding in any case the amount shown in the statement previously laid before Parliament. Further, subject to the provisions of articles 115 and 116, no money shall be withdrawn from the Consolidated Fund of India
except under appropriation made by law passed in accordance with the provisions of this article.
 
Article 115- Supplementary, Additional or Excess  Grants.
 
If the amount authorized through appropriations for a particular service is found to be insufficient for the purposes of that year or when a need has arisen during the current financial year for supplementary or additional expenditure upon some new service not contemplated in the annual financial statement for that year, a supplementary demands for grants proposal shall be made before parliament.
However, if any money has been spent on any service during a financial year in excess of the
amount granted for that service and for that year, demand for such excess, as the case may be is to be laid before both the Houses of Parliament for authorizing (subject to the report of the Public Accounts Committee) the expenditure incurred in excess.
 
Article 116- Vote on account, Vote of credit and Exceptional Grant.
 
The House of the People shall have power relating to
(a) Vote on Account- to make any grant in advance in respect of the estimated expenditure for a
part of any financial year pending the completion of the parliamentary procedure.
(b) Vote of Credit- to make a grant for meeting an unexpected demand upon the resources
of India when on account of the magnitude or the indefinite character of the service the demand cannot be stated with the details ordinarily given in an annual financial statement;
(c) Exceptional Grant- to make provision for an exceptional grant that does not form part of the
current service of any financial year;
Parliament shall have power to authorize by law the withdrawal of moneys from the Consolidated Fund of India for the above purposes.
 
Article 117- Special provisions as to Financial Bills.
 
A Bill or amendment making provision for any of the matters specified in sub-clauses (a) to (f) of clause (1) of article 110 shall not be introduced or moved except on the recommendation of the President and a Bill making such provision shall not be introduced in the Council of States.
 
Article 265- Taxes not to be imposed save by authority of law.
 
No tax shall be levied or collected except by authority of law.
 
Article 266- Consolidated Funds and Public Accounts of India and of the States.
 
Subject to the provisions of article 267 and to the provisions of this Chapter with respect to the
assignment of the whole or part of the net proceeds of certain taxes and duties to States, all revenues received by the Government of India , all loans raised and all moneys received by that Government in repayment of loans shall form one consolidated fund to be entitled “the Consolidated Fund of India”, and all revenues received by the Government of a State, all loans raised and all moneys received by that Government in repayment of loans shall form one
consolidated fund to be entitled “the Consolidated Fund of the State”.
 
All other public moneys received by or on behalf of the Government of India or the Government
of a State shall be credited to the public account of India or the public account of the State, as the case may be.
No moneys out of the Consolidated Fund of India or the Consolidated Fund of a State shall be
appropriated except in accordance with law and for the purposes and in the manner provided in this Constitution.
 
Article 267- Contingency Fund.
Parliament may by law establish a Contingency Fund in the nature of an imprest to be entitled “the Contingency Fund of India” into which shall be paid from time to time such sums as may be determined by such law, and the said Fund shall be placed at the disposal of the President to enable advances to be made by him out of such Fund for the purposes of meeting unforeseen expenditure pending authorization of such expenditure by Parliament by law. under article 115 or article 116. Similarly, the Legislature of a State may by law establish a Contingency Fund in the nature of an imprest to be entitled “the Contingency Fund of the State”.
 
Article 275- Grants from the Union to certain States.
 
Such sums as Parliament may by law provide shall be charged on the Consolidated Fund of
India in each year as grants-in-aid of the revenues of such States as Parliament may determine to be in need of assistance, and different sums may be fixed for different States. Provided, that after a Finance Commission has been constituted no order shall be made under this clause by the President except after considering the recommendations of the Finance Commission.
Article 280- Finance Commission.
 
The President shall, within two years from the commencement of this Constitution and thereafter at the expiration of every fifth year or at such earlier time as the President considers necessary, by order constitute a Finance Commission. It shall be the duty of the Commission to make recommendations to the President relating to—
(a) the distribution between the Union and the States of the net proceeds of taxes which are to
be, or may be, divided between them under this Chapter and the allocation between the States of the respective shares of such proceeds;
(b) the principles which should govern the grants-in-aid of the revenues of the States out of the
Consolidated Fund of India;
(bb) the measures needed to augment the Consolidated Fund of a State to supplement the
resources of the Panchayats in the State on the basis of the recommendations made by the Finance Commission of the State;
(c) the measures needed to augment the Consolidated Fund of a State to supplement the
resources of the Municipalities in the State on the basis of the recommendations made by the Finance Commission of the State;
(d) any other matter referred to the Commission by the President in the interests of
sound finance. The Commission shall determine their procedure and shall have such powers in the performance of their functions as Parliament may by law confer on them.
 
Article 281- Recommendations of the Finance Commission.
The President shall cause every recommendation made by the Finance Commission under the provisions of this Constitution together with an explanatory memorandum as to the action taken thereon to be laid before each House of Parliament.
 
Article 292- Borrowing by the Government of India.
The executive power of the Union extends to borrowing upon the security of the Consolidated Fund of India within such limits, if any, as may from time to time be fixed by Parliament by law and to the giving of guarantees within such limits, if any, as may be so fixed.
 
Article 150- Form of accounts of the Union and of the States.
The accounts of the Union and of the States shall be kept in such form as the President may, on
the advice of the Comptroller and Auditor-General of India, prescribe.
 
Article 151- Audit reports.
The reports of the Comptroller and Auditor- General of India relating to the accounts of the Union shall be submitted to the President, who shall cause them to be laid before each House of Parliament.
 
Article 109- Special procedure in respect of Money Bills.
A Money Bill shall not be introduced in the Council of States. After a Money Bill has been
passed by the House of the People it shall be transmitted to the Council of States for its
recommendations and the Council of States shall within a period of fourteen days from the date of its receipt of the Bill return the Bill to the House of the People with its recommendations and the House of the People may thereupon either accept or reject all or any of the recommendations of the Council of States.
 
Article 110- Definition of “Money Bills’’.
A Bill shall be deemed to be a Money Bill if it contains only provisions dealing with all or any of the following matters, (a) the imposition, abolition, remission, alteration or regulation of any tax; (b) the regulation of the borrowing of money or the giving of any guarantee by the Government of India, or the amendment of the law with respect to any financial obligations undertaken or to be undertaken by the Government of India; (c) the custody of the Consolidated Fund or the Contingency Fund of India, the payment of moneys into or the withdrawal of moneys from any such Fund; (d) the appropriation of moneys out of the Consolidated Fund of India; (e) the
declaring of any expenditure to be expenditure charged on the Consolidated Fund of India or the
increasing of the amount of any such expenditure; (f) the receipt of money on account of the Consolidated Fund of India or the public account of India or the custody or issue of such money or the audit of the accounts of the Union or of a State; or (g) any matter incidental to any of the matters specified in subclauses (a) to (f).
If any question arises whether a Bill is a Money Bill or not, the decision of the Speaker of the
House of the People thereon shall be final, and the certificate of the Speaker of the House of the People signed by him that it is a Money Bill, shall be endorsed on every Money Bill when it is transmitted to the Council of States under article 109, and when it is presented to the President for assent under article 111.


Saturday, 13th Feb 2016, 08:34:32 PM

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