The process of beginning with the presentation of the Budget and ending with discussions and voting is a very long one. With the government set to present the budget for 2015-16 in February, HT explains the Constitutional and Parliamentary intricacies of the exercise.
The Budget documents presented to Parliament comprise a lot of other things besides the finance minister's speech. These include:
· Annual Financial Statement
· Demands for Grants
· Appropriation Bill
· Finance Bill
· Memorandum Explaining the Provisions in the Finance Bill
· Macro-economic framework for the relevant financial year
· Fiscal Policy Strategy Statement for the financial year
· Medium Term Fiscal Policy Statement
· Expenditure Budget Volume-1
· Expenditure Budget Volume-2
· Receipts Budget
· Budget at a glance
· Highlights of Budget
Annual Financial Statement
This document shows the government's estimates to about what it expects to earn and spend during the year compared to the previous year
These are shown under the three parts in which government accounts are maintained:
· Consolidated Fund
· Contingency Fund
· Public Account
Consolidated Fund | Article 266
Of the Constitution which mandates that Parliamentary approval required to draw money from the Consolidated Fund of India
· All earnings of the government receives, its borrowings and also its receipts from recoveries of loans that it grants form the Consolidated Fund.
Contingency Fund | Article 267
Of the Constitution which mandates that Parliamentary approval required to draw money from the Contingency Fund
Rs 500 crore : The present corpus of the Contingency Fund of India
· Contingency Fund is an imprest or emergency pool of resources meant to meet urgent unforeseen expenditure
· Funds the government holds in Trusts such as provident funds, , small savings collections, income of government set aside for expenditure on specific schemes such as road development, primary education are all kept in the Public Account.
· Public Account funds do not belong to the government and have to be finally paid back to the persons and authorities who deposited them.
· Parliamentary authorisation for such payments is, therefore, not required.
Demand for Grants
· Of the Constitution that mandates that expenditure from the Consolidated Fund be voted by the Lok Sabha are submitted in the form of Demands for Grants
· Each department places demands for grants that are placed in the Lok Sabha along with the Annual Financial Statement
Appropriation Bill | Article 114 (3)
Of the Constitution that stipulates that no amount can be withdrawn from the Consolidated Fund without the enactment of a law. This sought through the Appropriation Bill
Finance Bill | Article 110
Of the Constitution under which the Parliament has to pass a law to approve changes in direct taxes
Every year the government imposes new taxes, abolishes some old ones, changes regulation and alters some existing income taxes. These are carried out by passing the Finance Bill.
Parliament has to pass the Finance Bill within 75 days of its introduction.What happens if it isn't?
It is viewed as a vote of no confidence against the government.
In case the deadline is approaching…
According to precedent:
· The speaker can call an all-party meeting
· Parliamentay affairs minister can personally reach out to the opposition
· The speaker can put the bill to a voice vote without debate.
Bills which exclusively contain provisions for imposition and abolition of taxes, for appropriation of moneys out of the Consolidated Fund, etc., are certified as Money Bills. Money Bills can be introduced only in Lok Sabha. Rajya Sabha cannot make amendments in a Money Bill passed by Lok Sabha and transmitted to it.
It can, however, recommend amendments in a Money Bill, but must return all Money Bills to Lok Sabha within fourteen days from the date of their receipt. It is open to Lok Sabha to accept or reject any or all of the recommendations of Rajya Sabha with regard to a Money Bill.
If Lok Sabha accepts any of the recommendations of Rajya Sabha, the Money Bill is deemed to have been passed by both Houses with amendments recommended by Rajya Sabha and accepted by Lok Sabha and if Lok Sabha does not accept any of the recommendations of Rajya Sabha, Money Bill is deemed to have been passed by both Houses in the form in which it was passed by Lok Sabha without any of the amendments recommended by Rajya Sabha. If a Money Bill passed by Lok Sabha and transmitted to Rajya Sabha for its recommendations is not returned to Lok Sabha within fourteen days, it is deemed to have been passed by both Houses.
Some Categories of Money Bills
Finance Bill : Finance Bill is a secret bill introduced in Lok Sabha every year immediately after the presentation of the General Budget to give effect to the financial proposals of the Government of India for the following financial year. Finance Bills are treated as Money Bills as they substantially deal with amendments to various tax laws.
Appropriation Bill : An Appropriation Bill is introduced in Lok Sabha immediately after adoption of the relevant demands for grants. Such Bills are categorised as Money Bills as they seek to authorise appropriation from the Consolidated Fund of India, of all moneys required to meet the grants made by the House and the expenditure charged on the Consolidated Fund of India.
Not good with numbers? Here is Gaurav Choudhury's simple take on the budget