Parliamentary Procedures: Budget Process

Basics

The Constitution refers to the budget as the ‘annual financial statement’ under Article 112.
The term ‘budget’ has nowhere been used in the Constitution.
What is it ? – The budget is a statement of the estimated receipts and expenditure of the Government of India in a financial year, which begins on 1 April and ends on 31 March of the following year.

Components of Budget

Estimates of revenue and capital receipts.
Ways and means to raise the revenue
Estimates of expenditure
Details of the actual receipts and expenditure of the closing financial year and the reasons for any deficit or surplus in that year.
Economic and financial policy of the coming year.

Charged Expenditure

Emoluments and allowances of the President and other expenditure relating to his office.
Salaries and allowances of the Chairman and the Deputy Chairman of the Rajya Sabha and the Speaker and the Deputy Speaker of the Lok Sabha.
Salaries, allowances and pensions of the judges of the Supreme Court.
Pensions of the judges of high courts.
Salary, allowances and pension of the Comptroller and Auditor General of India.
Salaries, allowances and pension of the chairman and members of the Union Public Service Commission.
Administrative expenses of the Supreme Court, the office of the Comptroller and Auditor General of India and the Union Public Service Commission including the salaries, allowances and pensions of the persons serving in these offices.
The debt charges for which the Government of India is liable, including interest, sinking fund charges and redemption charges and other expenditure relating to the raising of loans and the service and redemption of debt.
Any sum required to satisfy any judgement, decree or award of any court or arbitral tribunal.
Any other expenditure declared by the Parliament to be so charged.

Stages in Enactment

Presentation of budget.
General discussion.
Scrutiny by departmental committees.
Voting on demands for grants.
Passing of appropriation bill.
Passing of finance bill.

Type of Grants

Type of Grant	What is it?
Supplementary Grant	It is granted when the amount authorised by the Parliament through the appropriation act for a particular service for the current financial year is found to be insufficient for that year
Additional Grant	It is granted when a need has arisen during the current financial year for additional expenditure upon some new service not contemplated in the budget for that year
Excess Grant	It is granted when money has been spent on any service during a financial year in excess of the amount granted for that service in the budget for that year.
Vote of Credit	Vote of credit is the financial grant given to the Executive from the resources of India to meet urgent financial requirements whose details cannot be shared ordinarily in a budget
Exceptional Grant	It is granted for a special purpose and forms no part of the current service of any financial year.
Token Grant	It is granted when funds to meet the proposed expenditure on a new service can be made available by reappropriation

Funds as per Constitution

Consolidated Fund of India
- This fund is filled by:
  - Direct and indirect taxes Loans taken by the Indian government
  - Returning of loans/interests of loans to the government by anyone/agency that has taken it
- The government meets all its expenditure from this fund.
- The government needs parliamentary approval to withdraw money from this fund.
- The provision for this fund is given in Article 266(1) of the Constitution of India.
- Each state can have its own Consolidated Fund of the state with similar provisions.
- The Comptroller and Auditor General of India audits these funds and reports to the relevant legislatures on their management.
Contingency Fund of India
- Provision for this fund is made in Article 267(1) of the Constitution of India.
- Its corpus is Rs. 500 crores. It is in the nature of an imprest (money maintained for a specific purpose).
- The Secretary of, Finance Ministry holds this fund on behalf of the President of India.
- This fund is used to meet unexpected or unforeseen expenditure.
- Each state can have its own contingency fund established under Article 267(2)
Public Accounts of India
- This is constituted under Article 266(2) of the Constitution.
- All other public money (other than those covered under the Consolidated Fund of India) received by or on behalf of the Indian Government are credited to this account/fund.
- This is made up of:
  - Bank savings account of the various ministries/departments
  - National small savings fund, defense fund
  - National Investment Fund (money earned from disinvestment)
  - National Calamity & Contingency Fund (NCCF) (for Disaster Management)
  - Provident fund, Postal insurance, etc.
  - Similar funds
- The government does not need permission to take advances from this account.
- Each state can have its own similar accounts.
- The audit of all the expenditure from the Public Account of India is taken up by the CAG