What are constitutional provisions related to Budget?
Q. Which of the following is/are true?
1) Term ‘budget’ has nowhere been used in the Constitution.
2) Article 112 deals with the budget.- Published on 03 Mar 17a. Only 1
b. Only 2
c. Both 1 and 2
d. Neither 1 nor 2
ANSWER: Both 1 and 2
- The Constitution refers to the budget as the ‘annual financial statement’ in Article 112.
- The term ‘budget’ has nowhere been used in the Constitution.
- The budget is a statement of the estimated receipts and expenditure of the Government of India in a financial year, which begins on 1st April and ends on 31st March of the following year.
The budget contains -
1. Estimates of revenue and capital receipts.
2. Ways and means to raise the revenue.
3. Estimates of expenditure.
4. Details of the actual receipts and expenditure of the closing financial year and the reasons for any deficit or surplus in that year.
5. Economic and financial policy of the coming year, that is, taxation proposals, prospects of revenue, spending programme and introduction of new schemes/projects.
- The Government of India has two budgets, namely, the Railway Budget and the General Budget.
- Former consists of the estimates of receipts and expenditures of only the Ministry of Railways.
- Latter consists of the estimates of receipts and expenditure of all the ministries of the Government of India (except the railways).
- The Railway Budget was separated from the General Budget in 1921 on the recommendations of the Acworth Committee.
The reasons for this separation are -
1. To introduce flexibility in railway finance.
2. To facilitate a business approach to the railway policy.
3. To secure stability of the general revenues by providing an assured annual contribution from railway revenues.
4. To enable the railways to keep their profits for their own development (after paying a fixed annual contribution to the general revenues).
Constitutional Provisions -
1. The President shall in respect of every financial year cause to be laid before both the Houses of Parliament a statement of estimated receipts and expenditure of the Government of India for that year.
2. No demand for a grant shall be made except on the recommendation of the President.
3. No money shall be withdrawn from the Consolidated Fund of India except under appropriation made by law.
4. No money bill imposing tax shall be introduced in the Parliament except on the recommendation of the President, and such a bill shall not be introduced in the Rajya Sabha.
5. No tax shall be levied or collected except by authority of law.
6. Parliament can reduce or abolish a tax but cannot increase it.
7. The Constitution has also defined the relative roles or position of both the Houses of Parliament with regard to the enactment of the budget in the following way -
a) A money bill or finance bill dealing with taxation cannot be introduced in the Rajya Sabha - it must be introduced only in the Lok Sabha.
b) The Rajya Sabha has no power to vote on the demand for grants; it is the exclusive privilege of the Lok Sabha.
c) The Rajya Sabha should return the Money bill (or Finance bill) to the Lok Sabha within fourteen days.
d) The Lok Sabha can either accept or reject the recommendations made by Rajya Sabha in this regard.
8. The estimates of expenditure embodied in the budget shall show separately the expenditure charged on the Consolidated Fund of India and the expenditure made from the Consolidated Fund of India.
9. The budget shall distinguish expenditure on revenue account from other expenditure.
