In all the parliamentary democracies, the budget, after having been prepared and passed by the executive government, is presented to the legislature, where it is discussed and finally voted on. The responsibility of presenting the budget to the legislature is that of the executive government .
What is the budget?
Budget is a term derived from the old English word ‘bougett’, the sack or pouch from which the chancellor of the Exchequer extracted his papers in presenting to Parliament the government’s financial program for the ensuing fiscal year.
By the term ‘budget’, it is commonly understood that it is a document presented by a government containing an estimate of proposed expenditure for a given period and proposed means of financing them for the approval of the Legislature
According to Article 112(1) of the Constitution, an annual financial statement (also known as budget), giving the estimated receipts and expenditure of the Central Government in respect of each financial year, is to be laid on the Table of the two Houses before the commencement of that year.
From the year 2017 onwards, the Railway Budget has been merged with General Budget and there is only one Union Budget.
When is the budget presented?
By convention, the last working day of February was fixed for the presentation of budget. Since 2017, the Presentation of the Union Budget has been advanced to the 1st of February.
Which documents are placed before Parliament along with the Union Budget?
The following documents are placed before Parliament along with the Union Budget
(a) Annual Financial Statement (AFS)
(b) Demands for Grants (DG)
(c) Finance Bill
(d) Statements mandated under FRBM Act:
i. Macro-Economic Framework Statement
ii. Fiscal Policy Strategy Statement
iii. Medium Term Fiscal Policy Statement
(e) Expenditure Budget
(f) Receipts Budget
(g) Expenditure Profile
(h) Memorandum Explaining the Provisions in the Finance Bill
(i) Budget at a Glance
(j) Highlights of the budget
(k) Status of implementation of announcements made in the Finance Minister’s budget speech
Stages in enactment of Budget
The budget has to go through the following stages before it is finally passed by the parliament
1. Presentation to the Legislature
2. General discussion
3. Discussion and voting of the demand for grants
4. Consideration and passing of the appropriation bill
5. Consideration and passing of the Finance Bill
Presentation of Budget to the Legislature
In India, the budget requires to be recommended by the president before it is presented to the legislature, as under the Indian Constitution, the president’s recommendation is required for the imposition, abolition or regulation of a tax; for the egulation of borrowing money; and for withdrawls of money from the consolidated fund of India
While presenting the budget at 11.00 hours on the scheduled day in the Lok Sabha, the Finance Minister makes a speech giving inter alia details of the proposals for the new financial year regarding taxation, borrowings and expenditure.
The budget is laid on the Table of the Rajya Sabha soon after the Finance Minister has completed his budget speech in the Lok Sabha.
There is no discussion on the budget on the date it is presented to the parliament
General discussion on Budget
In consultation with the Ministry of Finance, the Ministry of Parliamentary Affairs fixes dates for general discussion on the budget.
The discussion is confined to the budget as a whole or any question of principle involved therein.
The Finance Minister has the right to reply to the general discussion in both Houses.
After the conclusion of the general discussion, the Vote on Account is passed by the Parliament to enable the Government to carry on until the voting of the Demands for Grants and passing of the general Appropriation Bill.
| What is a vote on account?The Constitution provides for a vote on account, i.e. for grants in advance to bemade by the Parliament to enable the Government to carry on until the voting of theDemands for Grants and the passing of the general Appropriation Bill (Art. 116(1) (a) and (2))A vote on account is formal business, and as such, there is normally no discussionIn the House, the idea is simply that Government functions should notcome to a standstill because of the absence of the vote of the House authorising the expenditureAs a convention, a vote on account is normally passed without discussion |
What are Demands for Grants?
After the general discussion on the Budget in the House is over, the Houses are adjourned for a fixed period (also known as recess) to enable the Departmentally Related Standing Committees to consider the Demands for Grants.
After the recess, the Demands for Grants of individual departments are taken up in the Lok Sabha for discussion according to a timetable as decided at the meeting of the Business Advisory Committee of the House and voted upon.
What are cut motions?
When a demand is taken up for discussion, any member may seek a reduction in the amount of the demand by moving any of the following types of cut motions, a notice of which having been given by him earlier.
(a) ‘Disapproval of Policy Cut’ by moving “that the amount of the demand be reduced to Re. 1”, thus representing disapproval of the Policy underlying the demand.
(b) ‘Economy Cut’, by moving “that the amount of the demand be reduced by a specified amount” representing the economy that can be effected.
(c) ‘Token Cut’, by moving “that the amount of the demand be reduced by Rs. 100” in order to ventilate a specific grievance, which is in the sphere of the responsibility of the Government of India.
What is Guillotine ?
On the last day of the days allotted for discussion on the Demands for Grants, at the time fixed in advance, the Speaker shall put all the outstanding Demands for Grants to the Vote of the House. This process is known as Guillotine.
The Presiding Officer calls for vote for the remaining demands one after the other, and thus all the demands are voted upon within the allotted time. Ministers concerned with the departments whose Demands for Grants have not been discussed in the Lok Sabha and are to be guillotined should be present in the House at the time of guillotine so that they may answer any points which may be raised by members.
What is the Appropriation Bill?
An appropriation Bill is like a formal legislation to give effect to charges already voted by the legislature and expenditure charged on the consolidated fund of India by the constitution
After the voting on the Demands has been completed, an Appropriation Bill is introduced in the Lok Sabha seeking “to authorise payment and appropriation of the sums so voted, as well as those required for meeting the charged expenditure from and out of the Consolidated Fund of India for the services during the financial year.”
After the Bill has been passed by the Lok Sabha, it is transmitted to the Rajya Sabha for consideration and return .
What is a finance bill?
Finance bill means the bill ordinarily introduced each year to give effect to the financial proposals of the Government of India for the next financial year, and includes a bill to give effect to supplementary financial proposals for any period.
The Finance Bill, containing the annual taxation proposals, is considered and passed by the Lok Sabha only after the Demands for Grants have been voted and the total expenditure is known.
There is, however, no statutory bar to consider the Bill containing permanent taxation measures before the Demands for Grants have been voted on