Union Budget 2017: Legislative process behind introducing budget
The budget is a statement of the estimated receipts and expenditure of the Government of India in a financial year.
The word Budget is not mentioned in the Indian Constitution. Article 112 refers to an annual financial statement.
The budget is introduced as a money bill in Lok Sabha or Lower House of Indian Parliament only (Article 109). Money bill consists of demand for grants of all ministries. A budget has two components – Finance and Appropriation.
Constitutional provisions related to the enactment of the budget:
- Article 110 (1) – Definition of money bill which includes change in taxes, money borrowed by the Government of India and related laws, appropriation of money out of Consolidated Fund of India, and withdrawing money from Consolidated or Contingency Fund of India.
- Article 110 (4) – The Money bill has a certificate signed by the Speaker of the Lok Sabha stating that the bill is a money bill when it is presented to the President for assent.
- Article 117 – A money bill which seeks to present the budget can be introduced only after the President makes such a recommendation.
Stages of enactment of a money bill
- Presentation of Budget: This is the first stage of the budget where, the Union Finance Minister presents the budget in the Lok Sabha in the form of a budget speech. After the speech, the budget is laid before the Rajya Sabha.
- General Discussion: A general discussion is held on the budget for a duration of three-four days. This discussion is conducted a few days after the budget is presented.
- Scrutiny by Departmental Committee: After the general discussion, the Parliament adjourns for four weeks. During this time, 24 departmental standing committees examine the money bill in detail and prepare a report.
- Voting on demand for grants (finance bill): Voting on demand for grants is a privilege of Lok Sabha. Demands of every ministry are voted upon by members. A period of 26 days are reserved for voting. Once a demand is duly voted, it becomes a grant. Members can move a cut motion to reduce any demand for grant. Such motions are not passed as government enjoys majority support.
- Policy Cut Motion– It represents disapproval of policy underlying the demand.
- Economy Cut Motion – If economy can be affected by proposed expenditure, an economy cut motion is moved.
- Token Cut Motion – It is moved regarding a specific grievance.
- Appropriation Bill: All grants that are approved in the finance bill are charged on the Consolidated Fund of India (CFI). An appropriation bill is introduced to release money from CFI to meet grant requirements and expenditure charged thereof.
Thus, the budget has a detailed procedure laid out in the Constitution. And it is important to keep in mind these points for competitive exams.