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Financial Procedure
The Budget, Grants & The Keys to the Consolidated Fund
PART I — THE ESTIMATES
ARTICLE 112
Annual Financial Statement
- The Constitution does not use the word "Budget"; it refers to the **Annual Financial Statement**.
- It is a statement of the estimated receipts and expenditure of the Government of India for a financial year (April 1 to March 31).
- It is presented to Parliament by the Finance Minister, acting on behalf of the President.
ARTICLE 113
Demands for Grants
- The estimates of expenditure from the Consolidated Fund must be voted on by the **Lok Sabha**.
- These are presented in the form of "Demands for Grants." Each ministry presents a demand for its expenditure.
- The Lok Sabha has exclusive power to assent to, refuse, or reduce the amount specified in any demand. (Rajya Sabha only discusses it).
PART II — LEGISLATIVE AUTHORIZATION
ARTICLE 114
Appropriation Bill
- **The Golden Rule:** No money shall be withdrawn from the Consolidated Fund of India except under appropriation made by law.
- After the Demands for Grants are voted, the Appropriation Bill is introduced to give legal effect to them.
- Without passing this bill, the government cannot legally spend a single rupee from the Consolidated Fund.
REVENUE INFLOW
The Finance Bill
- Introduced to give effect to the financial proposals (taxation) of the Government of India for the following financial year.
- It completes the budget process. While the Appropriation Bill handles the *outflow* (expenditure), the Finance Bill handles the *inflow* (revenue/taxes).
- It is subjected to all the conditions applicable to a **Money Bill**.
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