Annual Financial Statement And Charged Expenditure

The budget is referred to in the Constitution as the 'annual financial statement.' To put it another way, the term "budget" does not appear in the Constitution. Article 112 of the Constitution deals with the 'annual financial statement,' and this is the popular name for it.

 

The budget is a statement of the Government of India's estimated receipts and expenditures for a fiscal year that begins on April 1 and ends on March 31 of the following year.

 

The budget includes a number of other items in addition to the estimated receipts and expenditures.

 

The following items are included in the budget:

 

 Estimates of revenue and capital receipts;

 

 Ways and means to raise the revenue;

 

 Estimates of expenditure;

 

Details of the closing financial year's actual receipts and expenditures, as well as the reasons for any deficit or surplus in that year; and

 

Taxation proposals, revenue prospects, spending programme, and the introduction of new schemes/projects are all part of the upcoming year's economic and financial policy.

 

The Railway Budget and the General Budget are the two budgets of the Indian government. The former includes only the Ministry of Railways' estimates of receipts and expenditures, whereas the latter includes all of the Government of India's ministries' estimates of receipts and expenditures (exceptthe railways).

 

 

•    To make railway financing more flexible.

 

•    To make it easier to take a business-oriented approach to railway policy.

 

•    Providing a guaranteed annual contribution from railway revenues to ensure the stability of general revenues.

 

•    To allow railways to keep their profits and invest in their own development (after paying a fixed annualcontribution to the general revenues).

The railway budget was merged into the general budget by the Central Government in August 2016. The Finance Ministry has formed a five-member committee to work out the merger modalities, which includes officials from both the Finance Ministry and the Railway Ministry. The Modi government's reform agenda includes scrapping the age-old practise of a separate railway budget.

 

1. The President shall cause a statement of estimated receipts and expenditures of the Government of India for each financial year to be laid before both Houses of Parliament.

 

2. No request for a grant may be made unless the President recommends it.

 

3. No money may be taken from the Consolidated Fund of India unless it has been appropriated by law.

 

4. No money bill imposing a tax shall be introduced in Parliament unless the President recommends it, and no such bill shall be introduced in the Rajya Sabha.

 

5. No tax may be imposed or collected unless it is authorised by law.

 

6. A tax can be reduced or eliminated by Parliament, but it cannot be increased.

 

7. In relation to the enactment of the budget, the Constitution has also defined the relative roles or positions of both Houses of Parliament as follows:

 

• A taxation-related money bill or finance bill cannot be introduced in the Rajya Sabha; it must be introduced only in the Lok Sabha.

 

• The Rajya Sabha does not have the authority to vote on grant requests; this is a privilege reserved for the Lok Sabha.

 

• Within fourteen days, the Rajya Sabha should return the Money Bill (or Finance Bill) to the Lok Sabha. The Lok Sabha has the option of accepting or rejecting the Rajya Sabha's recommendations in this matter.

 

8. In the budget estimates of expenditure, the expenditure charged on the Consolidated Fund of India and the expenditure made from the Consolidated Fund of India must be shown separately.

 

9. The budget must distinguish between revenue and non-revenue expenditures.

 

10. Expenditures charged to the Consolidated Fund of India are not subject to parliamentary approval.

 

The Parliament, on the other hand, can debate it.

 

The budget is divided into two categories: expenditures 'charged' against the Consolidated Fund of India and expenditures'made' from the Consolidated Fund of India. The charged expenditure is non-votable in Parliament, meaning it can only be discussed, whereas the other type must be voted on. The following is a list of the charged expenses:

 

1.    President's emoluments and allowances, as well as other office-related expenses

 

2.    Salaries and allowances of the Rajya Sabha Chairman and Deputy Chairman, as well as the Lok Sabha Speaker and Deputy Speaker.

 

3.    Judges of the Supreme Court's salaries, allowances, and pensions.

 

4.    Judges of the highest courts' pensions.

 

5.    The Comptroller and Auditor General of India's salary, allowances, and pension.

 

6.    Salaries, allowances, and pensions of the Union Public Service Commission's chairman and members.

 

7.    Expenses for the Supreme Court, the Comptroller and Auditor General of India, and the Union Public Service Commission, including salaries, allowances, and pensions for those employed in these positions.

 

8.    Interest, sinking fund charges, redemption charges, and other expenditure relating to the raising of loans and the service and redemption of debt for which the Government of India is liable.

 

9.    Any sum required to satisfy any court or arbitral tribunal's judgement, decree, or award.

 

Any other expenditure that the Parliament declares to be so charged.

 

The Indian Constitution provides for three different types of funds for the central government:

 

1. India's Consolidated Fund (Article 266)

2. India's Public Accounts (Article 266)

3. India's Contingency Fund (Article 267)

 

The Consolidated Fund of India is a fund to which all receipts and payments are credited and debited. In other words, the Consolidated Fund of India is made up of (a) all revenues received by the government of India; (b) all loans raised by the government through the issue of treasury bills, loans, or other ways and means of advances; and (c) all money received by the government in repayment of loans. This fund is used to make all legally authorised payments on behalf of the Indian government. No money from this fund can be appropriated (issued or drawn) unless a parliamentary law authorises it.

 

Public Account of India: All other public money received by or on behalf of the Government of India (other than that credited to the Consolidated Fund of India) shall be credited to the Public Account of India. Deposits in provident funds, judicial deposits, savings bank deposits, departmental deposits, and remittances are all examples of this. This account is managed by executive action, which means payments can be made without the need for a parliamentary appropriation. The majority of these payments are in the form of banking transactions.

 

The Constitution of India authorises the Parliament to establish a 'Contingency Fund of India,' into which amounts determined by law are paid on a regular basis. As a result, in 1950, the Parliament passed the India Contingency Fund Act. This fund is placed at the president's disposal, and he can use it to cover unexpected expenses while waiting for Parliament to approve it. The finance secretary manages the fund on behalf of the president. It is run by executive order, just like India's public account.