The Lok Sabha recently cleared the Appropriation Bill, which permits the Central government to draw funds from the Consolidated Fund of India (CFI). This article explores the key elements and procedures associated with this legislation.
Understanding the Appropriation Bill
The Appropriation Bill empowers the government to withdraw funds from the CFI to cover expenditure during a financial year. According to article 114 of the Constitution, the government can only access money from the CFI after parliamentary approval. These funds are allocated to handle the ongoing expenses throughout the fiscal year.
The Appropriation Bill Procedure
Once budget proposals and Voting on Demand for Grants discussions have occurred, the Appropriation Bill is introduced in the Lok Sabha. The bill’s defeat during a parliamentary vote could result in either a government resignation or a general election. After passing the Lok Sabha, it is forwarded to the Rajya Sabha.
Rajya Sabha’s Role
The Rajya Sabha has the authority to suggest amendments to the bill. Nevertheless, it’s up to the Lok Sabha to accept or disregard these recommendations. Once the president grants assent, the legislation becomes an Appropriation Act. A unique feature of the Appropriation Bill is its automatic repeal clause. This means the Act nullifies itself once its legal purpose is fulfilled.
‘Vote on Account’ Provision
It may take time for the government to withdraw money from the CFI following the enactment of the appropriation bill. During this period, the government requires funds to carry on its standard operations. To facilitate this, the constitution enables the Lok Sabha to advance a grant for part of the financial year. This arrangement is known as ‘Vote on Account’.
Facts about Vote on Account
Defined by Article 116 of the Indian Constitution, a ‘Vote on Account’ is an advance grant that allows the central government to cover short-term expenses from the CFI. This typically lasts for several months until the new fiscal year begins. In an election year, the government usually opts for an ‘interim Budget’ or a ‘Vote on Account’, as post-election, the ruling government and its policies may change.
Amendments in Appropriation Bills
No amendments can be proposed to an Appropriation Bill that would alter any grant’s amount or destination. The Lok Sabha Speaker has the final say on whether such an amendment is permissible.
Difference Between Appropriation and Finance Bill
While the Finance Bill includes provisions to finance government expenditure, an Appropriation Bill dictates how much money will be withdrawn and for what purpose. Both types of bills are categorized as money bills and do not require Rajya Sabha’s explicit consent. The Rajya Sabha only discusses and returns these bills.
Defining a Money Bill
Only bills containing provisions related to taxation, government borrowing, and expenditure from, or receipt into, the CFI can be classified as Money Bills. Bills containing provisions incidental to these matters would also be classified as Money Bills.
About Consolidated Fund of India (CFI)
The CFI was established under Article 266 (1) of the Indian Constitution. It comprises all revenues received by taxes (like Income Tax, Central Excise, Customs, and other receipts), all non-tax revenues, and all loans raised by issue of Public notifications, treasury bills (internal debt) and from foreign governments and international institutions (external debt). All government expenditures come from this fund except for exceptional items that are met from the Contingency Fund or the Public Account. The Comptroller and Auditor-General of India (CAG) audits the fund and reports to the corresponding legislators on its management.
Stages of the Budget in Parliament
The budget undergoes several stages in parliament: It is presented, discussed generally, scrutinized by Departmental Committees, voted on for Demands for Grants, an Appropriation Bill is passed, and then a Finance Bill is passed.