According to the first clause of Article 112, “Every year the President causes to be placed before both the Houses of Parliament the annual financial statement, or the budget, in respect of “the estimated receipts and expenditure of the Government of India for that year”. The presentation of the budget by the Financial Minister customarily on the last day of February simultaneously in both the Houses of Parliament is a great event every year. Budget is not a mere statement of the estimates of revenue and expenditure for the next financial year, but also a fiscal instrument of wider socio-political implications for regulating the whole range of economic activities in the country.
Role of Budget of India
Apart from the estimated expenditure for a coming financial year, the budget contains the ways and means to raise the revenue for the year. It also presents an analysis of the actual receipts and expenditure during the closing year together with the causes for any deficit or surplus during the year. The presentation of the budget is preceded by a few days by a statement by the Finance Minister on the general economic affairs of the nation.
Estimates of Expenditure
The estimates of expenditure for any financial year are required to be shown separately as “expenditure charged on the Consolidated Fund of India” and “expenditure proposed to be made from the Consolidated Fund of India”, also referred to as non-votable and votable expenditure, respectively. There is also the requirement to “distinguish expenditure or revenue account from other expenditure,” and this provides opportunity for separate revenue and capital budgeting.
Expenditure charged on the Consolidated Fund
The Constitution in clause (3) of article 112 specifies the expenditure to be charged on the Consolidated Fund of India. The following expenditure shall be expenditure charged on the Consolidated Fund of India:-
a) Emoluments and Allowances of the President and his office.
b) Salaries and allowances of the Chairman, Deputy Chairman of the Council of States
c) Salaries and allowances of Speaker and Deputy Speaker
d) Salaries, allowances, pension payable to Judges of Supreme Court
e) Others
Non-votable and Votable Expenditure
The part of the estimates of expenditure, which is charged on the Consolidated Fund of India, is not submitted to the vote of Parliament, although it may be discussed in a House. The rest of estimates is treated as votable and submitted to the Lok Sabha in the form of demands for grants.
Demand for Grants
The votable part of the estimates of expenditure is presented in the form of demands for grants to the Lok Sabha. A demand for grant can be made only on the recommendation of the President. It is compulsory to present separate demands for grants for the different ministeries. The House has the power to accept, reject or reduce any demand for grant, but it cannot increase any such demand.