Previous Year Question

Under Article 266(3), no money can be appropriated out of the Consolidated Fund of India except in accordance with the Constitution and for purposes and in the manner provided by law.

Article 114(3) further clarifies that money can be withdrawn from the Consolidated Fund only under an appropriation made by law. This legal authority is provided through an Appropriation Act enacted by Parliament.

Process of parliamentary authorisation

1. Annual Financial Statement: Estimated receipts and expenditure are presented before Parliament under Article 112.

2. Demands for Grants: Under Article 113, expenditure subject to voting is submitted to the Lok Sabha in the form of Demands for Grants.

3. Voting by the Lok Sabha: The Lok Sabha may approve, reject or reduce a Demand. The Rajya Sabha does not vote on Demands for Grants.

4. Appropriation Bill: After voting on Demands for Grants, an Appropriation Bill is introduced under Article 114. It includes:

   • Grants voted by the Lok Sabha; and

   • Expenditure charged on the Consolidated Fund of India.

5. Appropriation Act: After passage by Parliament and presidential assent, the Bill becomes the Appropriation Act. Only then does legal authority exist to withdraw money from the Consolidated Fund.

Important fact regarding charged expenditure

Expenditure charged on the Consolidated Fund is not submitted to the vote of the Lok Sabha, although it may be discussed. Despite not being voted upon, it must be included in the Appropriation Bill.

Charged expenditure principally includes:

• Salary, allowances and expenditure relating to the office of the President.

• Salaries and allowances of the Chairman and Deputy Chairman of the Rajya Sabha and the Speaker and Deputy Speaker of the Lok Sabha.

• Expenditure relating to the Judges of the Supreme Court.

• Expenditure relating to the Comptroller and Auditor General of India.

• Debt charges and interest payable by the Government of India.

• Sums required to satisfy a judgment or award of a court or arbitral tribunal.

Therefore, ‘not being voted upon’ does not mean ‘not requiring parliamentary authorisation’. Charged expenditure is also included in the Appropriation Act.

Why are the other options incorrect?

• President: The President gives assent to the Appropriation Bill but cannot independently authorise withdrawal without parliamentary approval.

• Prime Minister: The Prime Minister or Council of Ministers may propose expenditure, but legal authority ultimately comes from parliamentary appropriation.

• Finance Minister: The Finance Minister presents the Budget and Appropriation Bill but cannot personally authorise withdrawal from the Fund.

Special financial arrangements

Supplementary, additional and excess grants under Article 115 and a vote on account under Article 116 are also subject to parliamentary approval and appropriation. An advance may be made from the Contingency Fund for urgent unforeseen expenditure, but it must subsequently be recouped after parliamentary authorisation.

Therefore, the authority for withdrawing money from the Consolidated Fund of India must come from Parliament.