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Article 114 of the Indian Constitution: Appropriation Bills

Part: V
Shorthand Notes: Appropriation Bill, CFI Withdrawal, Grants, Charged Expenditure

Article 114 of the Indian Constitution is a crucial part of India’s financial procedure, laying down the legal basis for the government to withdraw money from the Consolidated Fund of India (CFI) for its expenditure. Following the presentation of the Annual Financial Statement (Budget) and the completion of the voting on demands for grants by the Lok Sabha as per Article 113, Article 114 mandates the introduction of an Appropriation Bill.

This article essentially operationalizes the grants voted by the Lok Sabha and the expenditure charged on the CFI. It ensures that no money can be drawn from the Consolidated Fund of India without the explicit legislative sanction provided by an Appropriation Act, thereby upholding the principle of parliamentary control over public finance.

Original Text

114. Appropriation Bills

(1) As soon as may be after the grants under article 113 have been made by the House of the People, there shall be introduced a Bill to provide for the appropriation out of the Consolidated Fund of India of all moneys required to meet— (a) the grants so made by the House of the People; and (b) the expenditure charged on the Consolidated Fund of India but not exceeding in any case the amount shown in the statement previously laid before Parliament.

(2) No amendment shall be proposed to any such Bill in either House of Parliament which will have the effect of varying the amount or altering the destination of any grant so made or of varying the amount of any expenditure charged on the Consolidated Fund of India, and the decision of the person presiding as to whether an amendment is admissible under this clause shall be final.

(3) Subject to the provisions of articles 115 and 116, no money shall be withdrawn from the Consolidated Fund of India except under appropriation made by law passed in accordance with the provisions of this article.

Detailed Explanation

Article 114 is pivotal in the Indian parliamentary system’s financial framework. It outlines the process by which the government obtains the legal authority to spend money from the Consolidated Fund of India (CFI). The CFI, established under Article 266, is the primary account into which all revenues received by the Government of India, all loans raised by the Government, and all moneys received by it in repayment of loans are credited. All expenditure of the Government of India is met from this fund.

Clause (1) of Article 114 mandates the introduction of an Appropriation Bill in the Lok Sabha as soon as possible after the grants have been voted under Article 113. This Bill is designed to authorize the withdrawal of funds from the CFI for two specific categories of expenditure:

  • The grants that have been voted and approved by the Lok Sabha. These represent the estimated expenditures of various ministries and departments for which parliamentary approval is required.
  • The expenditure that is ‘charged’ on the Consolidated Fund of India. This category includes items like the salaries and allowances of the President, Speaker, Deputy Speaker, judges of the Supreme Court and High Courts, Comptroller and Auditor General, etc., as well as debt charges. These expenditures are not subject to the annual vote of Parliament but are discussed. The Appropriation Bill includes these amounts, but Parliament cannot vote on them; they are simply included for information and legislative sanction for withdrawal. The amount included for charged expenditure cannot exceed the amount previously shown in the annual financial statement.

Clause (2) imposes a significant restriction on the amendments that can be proposed to an Appropriation Bill in either House of Parliament (Lok Sabha or Rajya Sabha). No amendment is permissible if it seeks to increase or decrease the amount of any grant already voted by the Lok Sabha or change its intended use (destination). Similarly, no amendment can propose to alter the amount of expenditure charged on the Consolidated Fund of India. This clause ensures that the decisions taken during the voting of grants in the Lok Sabha under Article 113 and the charged expenditure amounts presented in the budget are respected and not reopened during the passage of the Appropriation Bill. The finality of the presiding officer’s decision on the admissibility of an amendment reinforces this restriction.

Clause (3) unequivocally states the constitutional principle that, subject to the provisions related to Supplementary, Additional, or Excess Grants (Article 115) and Votes on Account, Votes of Credit, and Exceptional Grants (Article 116), no money can be withdrawn from the Consolidated Fund of India without a law passed in accordance with Article 114. This means that unless the Appropriation Bill is passed by Parliament and receives the President’s assent, becoming the Appropriation Act, the government cannot legally spend the funds required to run the administration, even if the grants have been voted. This underscores the indispensable role of the Appropriation Act in controlling government spending.

Detailed Notes

  • Article 114 deals with Appropriation Bills.
  • It is part of the parliamentary financial procedure following the budget presentation and voting on demands for grants.
  • Clause (1): Mandates the introduction of an Appropriation Bill in the Lok Sabha after grants are voted under Article 113.
  • The Bill’s purpose is to provide legal authority for withdrawal of funds from the Consolidated Fund of India (CFI).
  • The Bill includes two categories of expenditure:
    • Grants voted by the Lok Sabha (under Article 113).
    • Expenditure charged on the CFI (as shown in the budget).
  • The amount for charged expenditure in the Bill cannot exceed the amount presented in the budget.
  • Clause (2): Restricts amendments to the Appropriation Bill in either House.
  • Amendments cannot propose:
    • Varying the amount of any voted grant.
    • Altering the destination (purpose) of any voted grant.
    • Varying the amount of any expenditure charged on the CFI.
  • The decision of the presiding officer on the admissibility of an amendment under this clause is final.
  • This clause prevents reopening of the decisions taken during the voting of grants and regarding charged expenditure.
  • Clause (3): Prohibits withdrawal of money from the CFI except under an Appropriation Act.
  • This is subject to provisions of Article 115 (Supplementary, Additional, Excess Grants) and Article 116 (Votes on Account, Votes of Credit, Exceptional Grants).
  • An Appropriation Act, passed in accordance with Article 114, is mandatory for the executive to spend money from the CFI.
  • The entire process (Budget -> Voting -> Appropriation Bill -> Appropriation Act) ensures parliamentary control over government spending.
  • It is a direct application of the principle: No expenditure without legislative sanction.

Additional Comments

  • The Appropriation Bill is a Money Bill as defined under Article 110, as it deals with the withdrawal of money from the Consolidated Fund of India.
  • As a Money Bill, it can only be introduced in the Lok Sabha.
  • The Rajya Sabha has limited powers regarding an Appropriation Bill; it can only suggest amendments, which the Lok Sabha is not bound to accept. The Bill must be returned to the Lok Sabha within 14 days.
  • Once the Appropriation Bill is passed by both Houses (or deemed passed after the Rajya Sabha’s 14-day period) and receives Presidential assent, it becomes the Appropriation Act.
  • The Appropriation Act is time-bound, typically covering expenditure for a single financial year (April 1 to March 31).
  • The ‘Guillotine’ is often applied to demands for grants in the Lok Sabha before the Appropriation Bill is taken up, where all outstanding demands are put to vote together due to time constraints.
  • The Appropriation Act is legally distinct from the Finance Act (which deals with revenue and taxation proposals, introduced under Article 110/117) although both are typically part of the annual budget exercise.
  • The passage of the Appropriation Bill is considered a matter of confidence in the government. Its defeat would likely lead to the government’s resignation.

Summary

Article 114 of the Indian Constitution requires the introduction of an Appropriation Bill after the Lok Sabha has voted on demands for grants and expenditure charged on the Consolidated Fund of India has been finalized. This Bill seeks parliamentary authorization to withdraw necessary funds from the Consolidated Fund. The article prohibits amendments that would alter the amounts or purposes of voted grants or change the charged expenditure amounts. Crucially, Article 114 mandates that no money can be withdrawn from the Consolidated Fund of India without an Appropriation Act passed in accordance with its provisions, thereby establishing a vital legislative check on executive spending.
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