The Legal Aspects of Budget

 The Legal Aspects of Budget

The budget is a declaration of the Government of India's expected receipts and expenditures for the fiscal year that begins in April and ends on March 31 of the following year.

The central budget in India dates back to 1860, when it was first implemented by then-finance minister James Wilson, two years after the East India Company's management was transferred to the British Crown. The Budget is given in 14 documents, some of which are required by the Indian Constitution and others which serve as explanatory texts.

Some additional major features of the Budget's constitutional and legal foundations are as follows:

Surprisingly, the word "budget" does not appear in the Indian Constitution.

Article 112 of the Constitution mandates that a 'Annual Financial Statement' be presented to Parliament, including the expected receipts and expenditures for the fiscal year. This statement shows the government's receipts and expenditures in three divisions, each with its own set of accounts. These are: I India's Consolidated Fund; (ii) India's Contingency Fund; and (iii) India's Public Account.

The Annual Financial Statement must identify spending on the revenue account from other expenditures, according to constitutional provisions. It consists of the following components:

Revenue budget: Interest and profits on government investments, fees, and other collections for government services are all included in the revenue budget.

Capital budget: The government's capital receipts and payments, including loans from the public and Reserve Bank borrowings.

Demand for Grants:

Article 113 requires that the estimates of expenditure from the Consolidated Fund of India included in the Annual Financial Statement be voted on by the Lok Sabha and submitted in the form of Demand for Grants. These requests are organised by ministry, with a distinct request for each of the key services.

Appropriations bill:

The Appropriation Bill is introduced in response to the Demand for Grants, appropriating funds from the Consolidated Fund of India to meet the grants as specified under Article 114. The purpose of the Appropriation Bill is to grant the government power to incur expenditure from and out of the Consolidated Fund of India. This Bill will be passed in the same way as other Money bills.

Finance bill: A Finance Bill is presented to Parliament at the same time as the Annual Financial Statement; the Finance Bill meets the definition of a 'Money Bill' because it provides for the imposition, abolition, remission, adjustment, or regulation of taxes recommended in the Budget. Under Article 110(1), a 'Money Bill' is defined.

It's important to remember that every Finance Bill is also a Money Bill, but not all Money Bills are Finance Bills. If a bill contains provisions dealing with six particular subjects listed in Article 110, it is considered a Money Bill (1). Article 110(1) (a) of the Constitution applies to the Finance Bill, which provides for the imposition, repeal, remission, change, or regulation of taxes suggested in the Budget.

Vote-on-account, credit vote, and extraordinary Grant: The Constitution grants the Lok Sabha the power to make a grant in advance for authorising the withdrawal of money from the Consolidated Fund of India in respect of the estimated expenditure for a part of any financial year, referred to as vote-on-account, pending the completion of the parliamentary procedure relating to the voting on the Demand for Grants and passing of the Appropriation Bill. The Lok Sabha can also make grants to satisfy unanticipated requests, known as a vote of credit, or to make an unusual grant.

Act of 2003 on Fiscal Responsibility and Budget Management:

The Fiscal Responsibility and Budget Management Act of 2003 demands that certain supplementary documents be put before Parliament in addition to the Budget documents. This contains the applicable financial year's macroeconomic framework, fiscal policy strategy statement, medium-term fiscal policy statement, and medium-term spending framework statement.

The finance minister presents the Budget to the Lok Sabha on the President's advice, which is received under Article 117(1) and 117(3) for introduction and consideration of the Budget.

                                              

                                                                                                                                    --By Shagun Mahendroo