The development came even as Uttarakhand is set to have a vote of confidence tomorrow to determine whether Congress leader Harish Rawat has enough numbers to retain power in the state that is currently under the President's Rule.
Moving the Appropriation Bill in the Lok Sabha, Jaitley said its passage will not have any bearing on the Vote of Confidence which will take place in the assembly tomorrow.
Jaitley said the state government, current or a new one, would be free to come out with its own budget as the Appropriation Bill seeks funds for only four months of the current fiscal.
Responding to objections over moving the bill, Jaitley said the state Governor had not given its approval to the budget and in absence of the approval, it could not be deemed to have been passed by the House on March 18.
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state as there was a constitutional crisis in the state with the Speaker approving the passage of the Budget rejecting the demand of division.
He said there is "serious doubt and cloud" on whether the Budget was passed on March 18 as majority of them members opposed its passage and demanded voting which was not accepted by the speaker.
Had the Central government not taken appropriate action by authorising the state to withdraw funds from consolidated fund of the state, there would have been the constitutional crisis, he said.
Responding to the criticism by Trinamool member Saugata Roy that the opinion of Uttarakhand Speaker should be final, Jaitley admitted that it cannot be questioned in the court of law but Centre under Article 356 could take action in case the government of a state fails to function in accordance with the provisions of the Constitution.
Opposing the passage of the Appropriation Bill, Gaurav Gogoi (Congress) said whatever has happened in the state is the "murder of the democracy" and questioned why the Appropriation Bill was brought a day before the floor testing in the assembly.
This government says it favours cooperative federalism but in fact it has been working for 'Congress-mukt Bharat' (Congress-free India), Gogoi said.
BJP-led government at the Centre is working to unseat democratically-elected governments in smaller states, he said.
He also cited the example of Madhu Koda government and Arjun Munda government in Jharkhand which were dismissed by the Congress government.
"Those who sit in glass houses should refrain from throwing stones on houses of others," he said.
Favouring the passage of the Bill on March 18, Nishank said whatever happened in the state assembly was unconstitutional.
He demanded that schemes which were there before 2010 should be implemented again and Vision 2020 of the previous government should also be put to effect.