FEBRUARY 01, 2023

By Vijay Kumar

WELL, it's Budget Time and keeping jest apart, let's recapitulate the Budget jargon. These are well-known - to most of us, but still a relook may be worthwhile.

Annual Financial Statement - also referred to as the Budget means the statement of estimated receipts and expenditure of the Central Government for the financial year.

Appropriation - the amount authorized by Parliament for expenditure.

Budget Estimates - detailed estimates of receipts and expenditure of a financial year.

Consolidated Fund of India - all revenues of the Union Government, loans raised by it and all moneys received in repayment of loans form one consolidated fund called the Consolidated Fund of India. No moneys out of this Fund can be appropriated except in accordance with the law and for the purposes and in the manner provided in the Constitution.

Contingency Fund - established under the Contingency Fund of India Act, 1950, in terms of Article 267 (1) of the Constitution. Contingency Fund is in the nature of an imprest. The Contingency Fund is intended to provide advances to the Government to meet unforeseen expenditure arising in the course of a year pending its authorization by the Parliament.

Outcome Budget - is the document prepared and presented annually to the Parliament, reflecting the purposes and objectives for which funds were provisioned, the cost of various programmes and activities proposed for achieving these objectives and quantitative projection of the work performed and services rendered under each programme and activity.

Revised Estimate - is an estimate of the probable receipts or expenditure for a financial year, framed in the course of that year, with reference to the transactions already recorded and anticipated for the remainder of the year.

Supplementary Demands for Grants - means supplementary demands laid before the Parliament, showing the estimated amount of further expenditure necessary in a financial year over and above the appropriation authorized.

Vote on Account - means a grant made in advance by the Parliament, in respect of the estimated expenditure for a part of new financial year, pending completion of the procedure relating to voting of the demand for grants and the passing of the Appropriation Act.

Voted expenditure - means expenditure which is subject to the vote of Lok Sabha. It is to be distinguished from 'charged' expenditure, which is not subject to vote, even though it can be discussed in the Parliament.

SOME BUDGET RELATED CONSTITUTIONAL PROVISIONS

Financial business in Parliament consists of the Budget comprising General Budget, Demands for Grants, Vote on Account, Supplementary Demands for Grants, Appropriation Bill and the Finance Bill. Some of the Constitutional provisions that guide the budgeting system and process are as under-

Article 109- Special procedure in respect of Money Bills

A Money Bill shall not be introduced in the Rajya Sabha. After a Money Bill has been passed by the Lok Sabha, it shall be transmitted to the Upper House for its recommendations and the Rajya Sabha shall within a period of fourteen days from the date of receipt of the Bill return it to the Lower House with its recommendations and the Lok Sabha 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 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 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 audit of the accounts of the Union or of a State; or

(g) any matter incidental to any of the matters specified in sub-clauses (a) to (f).

If any question arises whether a Bill is a Money Bill or not, the decision of the Speaker of the Lok Sabha shall be final, and the certificate of the Speaker signed by him that it is a Money Bill, shall be endorsed on every Money Bill when it is transmitted to the Rajya Sabha, and when it is presented to the President for assent.

It may be recollected that the Aadhaar Bill was passed as a money bill. Does it satisfy any of the above conditions? It does; all it requires is a certificate from the speaker.

Article 112- Annual Financial Statement

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 of expenditure shall show separately expenditure charged upon the Consolidated Fund of India; and other expenditure (voted). The statement shall also distinguish expenditure on revenue account from other (capital) expenditure.

Article 113- Procedure in Parliament with respect to Estimates

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 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.

Article 115- Supplementary, Additional or Excess Grants

If the amount authorized through appropriation for a particular service is found to be insufficient for the purposes in that year or when a need has arisen during the financial year for supplementary or additional expenditure upon some new service not contemplated in the annual financial statement for that year, supplementary demands for grants proposal shall be made before the 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) expenditure incurred in excess.

Article 116- Vote on account, Vote of credit and Exceptional Grant

The Lok Sabha 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 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.

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 Rajya Sabha.

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 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.

BUDGET DOCUMENTS

The Union Budget is presented through various documents, some of which are Constitutionally/statutorily mandated, while others are explanatory documents. You will find the following documents in the Budget. I should have said 'budget papers', but now there are no papers. Budget is digital.

A. Finance Minister's Budget Speech

B. Annual Financial Statement (AFS)

C. Demands for Grants (DG)

D. Finance Bill

E. Statements mandated under FRBM Act

F. Expenditure Budget

G. Receipt Budget

H. Expenditure Profile

I. Budget at a Glance

J. Memorandum Explaining the Provisions in the Finance Bill

K. Output-Outcome Monitoring Framework

L. Key Features of Budget

M. Implementation of Budget Announcements

N. Key to Budget documents

Before you get through to all those heavy documents, smile through some Budget Quotes:

The government's budget is like a household budget, except the government doesn't have to balance it.

The government's budget is like a diet: it's easy to make, but hard to stick to.The government budget is like a Rubik's Cube. No matter how hard you try, you can't make it balance.

The government's budget is like a Titanic - it can only sink so fast.

The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt. - Cicero

The problem with government budgets is that they are almost always a reflection of how much politicians think they can get away with, rather than what the country can afford. - Thomas Sowell

Until Next week