New Delhi: Flowers bloom at Parliament during the ongoing Budget Session, in New Delhi, Wednesday, March 11, 2020. (PTI Photo/Kamal Kishore)

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Appropriation Bill

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Interim budget 2019

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Lok sabha

Arun Jaitley

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	Under Article 114(3) of the Constitution, no amount can be withdrawn from the Consolidated Fund without the enactment of such a law by Parliament. After the Demands for Grants are voted by the Lok Sabha, Parliament&#39;s approval to the withdrawal from the Consolidated Fund of the amounts so voted and of the amount required to meet the expenditure charged on the Consolidated Fund is sought through the Appropriation Bill.</div>
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	The whole process beginning with the presentation of the Budget and ending with discussions and voting on the Demands for Grants requires a fairly long time. The Lok Sabha is, therefore, empowered by the Constitution to make any grant in advance in respect of the estimated expenditure for a part of the financial year pending completion of procedure for the voting on the demands. The purpose of the &#39;Vote on Account&#39; is to keep the government functioning, pending voting of &#39;final supply&#39;. The Vote on Account is obtained from Parliament through an Appropriation (Vote on Account) Bill.</div>
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RELATED BUDGET TERMS

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What is Appropriation Bill, Appropriation Bill Meaning, Appropriation Bill Definition

What is Appropriation Bill

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	Article 113 of the Constitution mandates that the estimates of expenditure from the Consolidated Fund of India included in the Annual Financial Statement and required to be voted by the Lok Sabha be submitted in the form of Demands for Grants. The Demands for Grants are presented to the Lok Sabha along with the Annual Financial Statement.&nbsp;</div>
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	Generally, one Demand for Grant is presented in respect of each ministry or department. However, more than one demand may be presented for a ministry or department depending on the nature of expenditure. With regard to Union Territories without legislature, a separate demand is presented for each of the Union Territories. Each Demand first gives the totals of &#39;voted&#39; and &#39;charged&#39; expenditure as also the &#39;revenue&#39; and &#39;capital&#39; expenditure included in the demand separately, and also the grand total of the amount of expenditure for which the demand is presented.&nbsp;</div>
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	This is followed by the estimates of expenditure under different major heads of account. The breakup of the expenditure under each major head between &#39;Plan&#39; and &#39;Non-Plan&#39; is also given. The amounts of recoveries taken in reduction of expenditure in the accounts are also shown. A summary of Demands for Grants is given at the beginning of the Budget document, while details of &#39;New Service&#39; or &#39;New Instrument of Service&#39;, such as formation of a new company, undertaking or a new scheme, etc, if any, are indicated at the end of the document.</div>
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	Each demand normally includes the total provisions required for a service; that is, provisions on account of revenue expenditure, capital expenditure, grants to state and Union Territory governments, and also loans and advances relating to the service.&nbsp;</div>
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	In cases where the provision for a service is entirely for expenditure charged on the Consolidated Fund of India, for example, interest payments (Demand for Grant No 35), a separate Appropriation, as distinct from a Demand, is presented for that expenditure and it is not required to be voted by the Lok Sabha. However, where expenditure on a service includes both &#39;voted&#39; and &#39;charged&#39; items of expenditure, the latter are also included in the demand presented for that service but the &#39;voted&#39; and &#39;charged&#39; provisions are shown separately in that demand.</div>
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Learn what is meant by Demand for Grants or Demand for Grants definition and more Demand for Grants news here at Business Standard.

What is Demand for Grants, Demand for Grants Meaning, Demand for Grants Definition

Demand for Grants

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		The Expenditure Budget of the government highlights the allotment of funds for disbursement to different ministries, sectors, departments in a financial year as part of the Union Budget. The allotments are made under Plan and non-Plan estimates for departments and ministries concerned.&nbsp;</div>
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		The government prepares the expenditure portfolio in three different documents:&nbsp;</div>
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		<strong>1. Expenditure profile:</strong> The expenditure profile compiles relevant data across all ministries and departments to sketch a profile of the general financial performance of the government. It is one of the explanatory documents that aid economic analyses. The statements contained in this document are prepared on the basis of data given by ministries. Some of the statements are based on the data contained in the Expenditure Budget. It includes Budgetary trends on gender Budget, the welfare of women and children, resource allocation for the northeastern states and welfare of SC/STs.</div>
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		<strong>2. Demand for Grants:</strong> It is the document in which estimates of expenditure from the consolidated fund of India are submitted in pursuance of Article 113 of the Constitution. They are included in the annual financial statement and are required to be voted upon in the Lok Sabha. The demands for grants include both charged and voted expenditure. These are further classified as revenue and capital expenditure according to the nature of end-use.</div>
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		<strong>3. Expenditure Budget:</strong> As explained above, the Expenditure Budget contains details and estimates of the amount to be allocated to different ministries and departments for their proper functioning in a given financial year.&nbsp;</div>
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		<strong>What are the parts of Expenditure Budget?</strong></div>
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		The Expenditure Budget is further divided into capital expenditure and revenue expenditure.&nbsp;</div>
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	<strong>Capital Expenditure:</strong> This expenditure pertains to amount spent on the creation of assets and is a cause for a reduction in liabilities for the government. It is non-recurring in nature and adds to the capital stock of the economy, increasing its productivity through long-term developmental programmes and welfare schemes &mdash; for instance, construction of metro rail networks, highways, ports, etc. It also includes the loans given to Union Territories and states, and repayment of borrowings.&nbsp;</div>
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	<strong>Revenue Expenditure:</strong> This section details of expenditure that neither creates assets nor causes a reduction in liability for the government. It is recurring in nature and is incurred on the normal functioning of the government. The allocations under Revenue Expenditure include payment of salaries, pension, interests, expenditure on administration, defence, health, and other services in the country.</div>

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What is Expenditure Budget, Expenditure Budget Meaning, Expenditure Budget Definition

Expenditure Budget

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	The Budget speech, delivered by the Union Finance Minister in Parliament, has two sections &mdash; parts A and B.</div>
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	<strong>Part A of the budget speech</strong></div>
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	The first part of the budget speech provides an overview of the economy of the previous and current years, and also gives Budget estimates for the next financial year. Basically, part A covers review of the prevailing economic situation of the country, and is more concerned about the &lsquo;macro&rsquo; aspect of the economy.</div>
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	Part A provides the broad framework of expenditure in details for different sectors, introduces new schemes, and explains the priorities of the government. This segment of the Budget speech also specifies the focus areas of the government.</div>
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	In part A, the finance minister provides a brief overview of total funds raised by the government through taxes or borrowing, and discusses how the money is to be spent on Budget deficit/surplus. It also presents a complete breakdown of the expenditure of each ministry.</div>
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	Essentially, Part A deals with the general economic survey of the country. Fiscal deficit, current account deficit (CAD) and inflation are also discussed in Part A of the Budget speech.</div>
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	<strong>Part B of the Budget speech</strong></div>
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	The second part of the Budget speech highlights the government&rsquo;s tax proposals for the next financial year, and it has a direct bearing on the personal finance of citizens. Part B should also be read with the Finance Act, which is a document containing legal provisions. A reader can understand the provisions by going through the attached Memorandum of Explanations, which gives a broad background of changes.</div>
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	The second section of the speech apprises taxpayers of the state of the economy, the progress the government has made on various developmental measures, and the direction of future policies.</div>
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	While concluding Part B of the Budget speech, the finance minister describes proposals for taxation or discloses variations in the existing taxation system. The &lsquo;Annual Financial Statement&rsquo; is presented at the conclusion of the speech of the finance minister.</div>
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	<strong>Click on the links below to read full Budget speech from recent Union Budgets:</strong></div>
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	<u><span style="color:#0000ff;"><strong><a href="https://bsmedia.business-standard.com/_media/bs/data/general-file-upload/2020-01/Budget2014-Jaitley.pdf" target="_blank">Full Budget speech 2014 of Arun Jaitley</a></strong></span></u></div>
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	<u><span style="color:#0000ff;"><strong><a href="https://bsmedia.business-standard.com/_media/bs/data/general-file-upload/2020-01/Budget2015-Jaitley.pdf" target="_blank">Full Budget speech 2015 of Arun Jaitley</a></strong></span></u></div>
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	<u><span style="color:#0000ff;"><strong><a href="https://bsmedia.business-standard.com/_media/bs/data/general-file-upload/2020-01/Budget2016-Jaitley.pdf" target="_blank">Full Budget speech 2016 of Arun Jaitley</a></strong></span></u></div>
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	<u><span style="color:#0000ff;"><strong><a href="https://bsmedia.business-standard.com/_media/bs/data/general-file-upload/2020-01/Budget2017-Jaitley.pdf" target="_blank">Full Budget speech 2017 of Arun Jaitley</a></strong></span></u></div>
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	<u><span style="color:#0000ff;"><strong><a href="https://bsmedia.business-standard.com/_media/bs/data/general-file-upload/2020-01/Budget2018-Jaitley.pdf" target="_blank">Full Budget speech 2018 of Arun Jaitley</a></strong></span></u></div>
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	<u><span style="color:#0000ff;"><strong><a href="https://bsmedia.business-standard.com/_media/bs/data/general-file-upload/2020-01/InterimBudget2019-Goyal.pdf" target="_blank">Full Interim Budget speech 2019 of Piyush Goyal</a></strong></span></u></div>
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	<u><span style="color:#0000ff;"><strong><a href="https://bsmedia.business-standard.com/_media/bs/data/general-file-upload/2020-01/Budget2019-Sitharaman.pdf" target="_blank">Full Budget speech 2019 of Nirmala Sitharaman</a></strong></span></u></div>

Learn what is Budget speech, Budget speech Definition, Budget speech news and more here at Business Standard.

What is Budget speech, Budget speech News, Budget News, Budget speech Definition

Budget Speech

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	The Annual Financial Statement is a document presented to Parliament every financial year as part of the Budget process, as required under Article 112 of the Constitution of India. The documents consist of receipts and expenditures of the government in the current year, previous year and the Budget year in three separate parts &mdash; Consolidated Fund of India, Contingency Fund of India, and Public Account of India. The government presents a statement of receipts and expenditures for these accounts every year to Parliament.</div>
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	Loans raised by the government, borrowings from the Reserve Bank of India (RBI), and borrowings from foreign governments or institutions are shown under capital receipts, which also show loan recoveries, asset sale, disinvestment, etc.</div>
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	<strong>The difference between Annual Financial Statement and Budget</strong></div>
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	The term Budget is a common word for a number of documents, including the Annual Financial Statement. The other documents in the Budget include Demand for Grants, Appropriation Bill, Finance Bill, Memorandum Explaining the Provisions in the Finance Bill, Macroeconomic Framework Statement, Fiscal Policy Strategy Statement, Medium Term Expenditure Statement, etc.</div>
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	Annual Financial Statement distinguishes the expenditure on revenue account from the expenditure on other accounts, as mandated in the Constitution. Revenue and capital sections together form the Union Budget, so the Annual Financial Statement is basically the Budget of the government.</div>

Learn What is Annual Financial Statement, Annual Financial Statement Definition, Annual Financial Statement News and more here at Business Standard.

Appropriation Bill

What is Appropriation Bill

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