The budget goes through the following six stages in the
Parliament:
1. Presentation of
budget
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presented in two parts—Railway Budget (presented
first, presented by railway minister) and General Budget (presented after
railway budget by finance minister).
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The Finance Minister presents the General Budget
with a speech known as the ‘budget speech’. At the end of the speech in the Lok
Sabha, the budget is laid before the Rajya Sabha, which can only discuss it and
has no power to vote on the demands for grants.
2.
General discussion
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The general discussion on budget begins a few
days after its presentation. It takes place in both the Houses of Parliament
and lasts usually for three to four days.
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During this stage, the Lok Sabha can discuss the
budget as a whole or on any question of principle involved therein but no cut
motion can be moved nor can the budget be submitted to the vote of the House.
The finance minister has a general right of reply at the end of the discussion.
3.
Scrutiny by departmental committees
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After the general discussion on the budget is
over, the Houses are adjourned for about three to four weeks. During this gap
period, the 24 departmental standing committees of
Parliament examine and discuss in detail the demands for grants of the
concerned ministers and prepare reports on them. These reports are
submitted to both the Houses of Parliament for consideration.
The standing committee system established is 1993 (and expanded in 2004)
makes parliamentary financial control over ministries much more detailed, close,
in-depth and comprehensive.
4.
Voting on demands for grants
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In the light of the reports of the departmental
standing committees, the Lok Sabha takes up voting of demands for grants. The
demands are presented ministry wise. A demand
becomes a grant after it has been duly voted.
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the voting of demands for grants is the
exclusive privilege of the Lok Sabha, that is, the Rajya Sabha has no power of
voting the demands
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voting is confined to the votable part of the
budget—the expenditure charged on the Consolidated Fund of India is not
submitted to the vote (it can only be discussed).
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While the General Budget has a total of 109
demands (103 for civil expenditure and 6 for defense expenditure), the Railway
Budget has 32 demands. Each demand is voted separately by the Lok Sabha. During
this stage, the members of Parliament can discuss the details of the budget.
They can also move motions to reduce any demand for grant.
Such motions are called as ‘cut motion’, which are of three kinds:
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Policy
Cut Motion It represents the disapproval of the policy underlying the
demand. It states that the amount of the demand be reduced to Re 1. The members
can also advocate an alternative policy.
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Economy
Cut Motion It represents the economy that can be affected in the proposed
expenditure. It states that the amount of the demand be reduced by a specified
amount (which may be either a lumpsum reduction in the demand or omission or
reduction of an item in the demand).
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Token Cut
Motion It ventilates a specific grievance that is within the sphere of
responsibility of the Government of India. It states that the amount of the
demand be reduced by Rs 100.
A cut motion, to be admissible,
must satisfy the following conditions:
i.
It should relate to one demand only.
ii.
It should be clearly expressed and should not
contain arguments or defamatory statements.
iii.
It should be confined to one specific matter.
iv.
It should not make suggestions for the amendment
or repeal of existing laws.
v.
It should not refer to a matter that is not
primarily the concern of Union government.
vi.
It should not relate to the expenditure charged
on the Consolidated Fund of India.
vii.
It should not relate to a matter that is under
adjudication by a court.
viii.
It should not raise a question of privilege.
ix.
It should not revive discussion on a matter on
which a decision has been taken in the same session.
x.
It should not relate to a trivial matter.
The significance of a cut motion lies in: (a) facilitating the initiation
of concentrated discussion on a specific demand for grant; and (b) upholding
the principle of responsible government by probing the activities of the
government. However, the cut motion do not have much utility in practice. They
are only moved and discussed in the House but not passed as the government
enjoys majority support.
Their passage by the Lok Sabha amounts to the expressions of want of
parliamentary confidence in the government and may lead to its resignation.
In total, 26 days are allotted for the voting of demands. On the last day
the Speaker puts all the remaining demands to vote and disposes them whether
they have been discussed by the members or not. This is known as ‘guillotine’.
5.
Passing of appropriation bill.
The Constitution states that ‘no
money shall be withdrawn from the Consolidated Fund of India except under
appropriation made by law’. Accordingly, an appropriation bill is introduced to
provide for the appropriation, out of the Consolidated Fund of India, all money
required to meet:
(a)
The grants voted by the Lok Sabha.
(b)
The expenditure charged on the Consolidated Fund
of India.
No such amendment can be proposed
to the appropriation bill in either house of the Parliament that will have the
effect of varying the amount or altering the destination of any grant voted, or
of varying the amount of any expenditure charged on the Consolidated Fund of
India.
The Appropriation Bill becomes the
Appropriation Act after it is assented to by the President. This act authorizes
(or legalizes) the payments from the Consolidated Fund of India. This means
that the government cannot withdraw money from the Consolidated Fund of India
till the enactment of the appropriation bill. This takes time and usually goes
on till the end of April. But the government needs money to carry on its normal
activities after 31 March (the end of the financial year). To overcome this
functional difficulty, the Constitution has authorized the Lok Sabha to make
any grant in advance in respect to the estimated expenditure for a part of the
financial year, pending the completion of the voting of the demands for grants
and the enactment of the appropriation bill. This provision is known as the ‘vote on account’.
It is passed (or granted) after the general discussion on budget is over. It is
generally granted for two months for an amount equivalent to one-sixth of the
total estimation.
6.
Passing of finance bill
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The Finance Bill is introduced to give effect to
the financial proposals of the Government of India for the following year. It
is subjected to all the conditions applicable to a Money Bill.
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Unlike the Appropriation Bill, the amendments
(seeking to reject or reduce a tax) can be moved in the case of finance bill.
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According to the Provisional Collection of Taxes
Act of 1931, the Finance Bill must be enacted (i.e., passed by the Parliament
and assented to by the president) within 75 days.
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The Finance Act legalizes the income side of the
budget and completes the process of the enactment of the budget.
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