Dhruva Vig
Under the Constitution of India. Article 266(1) provides for the provision for the formation and maintenance of Consolidated Fund of India, under the head “Consolidated Funds and public accounts of India and of the States”. It says that,
“(1) Subject to the provisions of Article 267 and to the provisions of this Chapter with respect to the assignment of the whole or part of the net proceeds of certain taxes and duties to States, all revenues received by the Government of India, all loans raised by that Government by the issue of treasury bills, loans or ways and means advances and all moneys received by that Government in repayment of loans shall form one consolidated fund to be entitled the Consolidated Fund of India, and all revenues received by the Government of a State, all loans raised by that Government by the issue of treasury bills, loans or ways and means advances and all moneys received by that Government in repayment of loans shall form one consolidated fund to be entitled the Consolidated Fund of the State”.
In a nutshell, the consolidated fund of India is made up of
1. Any and all revenues received by the Centre by way of taxes (for e.g., Income Tax, Central Excise, Customs and other receipts) and all non-tax revenues as well.
2. Any and all loans raised by the Centre by way of issuing Public notifications, treasury bills (i.e., internal debt) and from foreign governments and international institutions (i.e., external debt).
The vast account of government expenditures is generally incurred from this fund (except for the case of exceptional items, which are to be met by way of Contingency Fund or the Public Account accordingly), and where no such amount can be withdrawn from the Fund without due authorization from the Parliament. The Comptroller and Auditor General (CAG) audits the account of the fund, and reports any discrepancies or findings to the relevant legislatures on the management of the Fund.
Furthermore, for the purposes of such withdrawal from the Consolidated Fund of the Union Territory of Jammu and Kashmir, an appropriation bill has to be passed by both houses, and duly given assent to by the president, to carry out the appropriate financial, developmental and administrative duties for the said financial year. Thus, for the financial year 2021-22, a new Appropriation Bill has received assent of the president on 25th of March 2021.
Object of the Act
The Bill is enacted with an intent to authorise payment and appropriation of certain sums from and out of the Consolidated Fund of the Union territory of Jammu and Kashmir for the services of the financial year 2021-22, as mentioned under the provisions of the Act itself.
From and out of the Consolidated Fund of the Union territory of Jammu and Kashmir, the Act shall allow and empower any transactions which may be paid and applied sums not exceeding those specified in column 3 of the Schedule specified under the Act, amounting in the aggregate to the sum of one lakh thirty thousand eight hundred thirty-two crores, twenty-three lakh and eighty-seven thousand rupees (Rs. 130832,23,87,000), towards the purposes of defraying the several charges which may arise in the course of payment during the financial year 2021-22 in respect of the services specified in ‘column 2’ of the Schedule
under the Act.
Another object of the act is to authorise the sums to be paid and applied from and out of the Consolidated Fund of the Union territory of Jammu and Kashmir, which shall be appropriated for the services and purposes expressed in the Schedule concerning to the said year of 2021-22.
Procedure Followed
The procedure that is followed, would be initiated with the Appropriation Bill being introduced in the Lok Sabha, after discussions on Budget proposals and Voting on Demand for Grants have been undertaken. The defeat/dismissal of an Appropriation Bill in a
parliamentary vote would lead to the resignation of a government or a general election in certain cases. Once it has been passed by the Lok Sabha (lower house), it is accordingly sent to the Rajya Sabha (upper house) for making out due considerations any suggestions. Rajya Sabha holds the power to recommend any amendments and modifications in this Bill if it deems it so.
However, it is the prerogative of the Lok Sabha to either accept such amendments, or reject the recommendations made by the Rajya Sabha altogether. After the Bill has received an assent from the president, it inevitably ends up becoming an Appropriation act for that particular year. One of the most unique features of the Appropriation Bill is its automatic repeal clause,
whereby the Act gets repealed by itself after it has met its statutory purpose for such
enactment.
Another notable feature of the Bill is is that the Government is not empowered to withdraw money from the Consolidated Fund of India till the Appropriation bill has been enacted. However, this process takes time, and the government requires money to carry on its normal activities. Therefore, to meet the immediate expenses, the Constitution has authorised the Lok
Sabha to make any grant in advance for a part of the financial year. This provision is known as the ‘Vote on Account’.
Amendment and Repeal
Under the procedure established, no amendment can be proposed to an Appropriation Bill, which shall 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 Lok Sabha Speaker as to whether such an amendment is admissible is considered as final. An amendment to an Appropriation Bill for the omission of a demand voted by the House is out of order and is not entertainable.
Since the year 2016, Appropriation bills in India have included an automatic repeal clause in its provisions, as a result of which the Act gets repealed after its purpose has been met. 2 Any and all Appropriation Acts passed prior to the year 2016 were repealed by way of enactment of The Appropriation Acts (Repeal) Act, 2015 in April 2016.
Appropriation Bill vs Finance Bill
While the Finance Bill contains provisions on financing the expenditure of the government, an Appropriation Bill specifies the quantum and purpose for withdrawing money. Both an appropriation and the finance bills are generally classified as money bills that do not require the explicit consent of the Rajya Sabha for its enactment. The Rajya Sabha only hold the purpose of discussing them and returning the bills back to the Lower House.
A Money Bill on the other hand is a whole another concept. A Bill is said to be a Money Bill if it only contains provisions relating to services of taxation, borrowing of money by the government (domestic or foreign), expenditure from or receipt to the Consolidated Fund of India. Any Bills which only contain the provisions that are incidental to these matters shall also be regarded as Money Bills under the law.
Need for an Appropriation Bill
As discussed above, an Appropriation Bill is made out on a yearly basis for the purposes of authorising payment and appropriation of certain sums from and out of the Consolidated Fund of the Union territory of Jammu and Kashmir for services incidental thereto. Thus, the scope of these services, which may be mentioned in the schedule of the Act itself, may cover a lot of ground to render a multitude of Governmental duties and obligations at both administrative and financial level.
Legal Provisions
Under the provisions laid out in the notification published in the Official Gazette, the Act shall consist of following provisions:
Under Section 1, it says that “this Act may be called the Jammu and Kashmir Appropriation (No. 2) Act, 2021.” This shall be the Short title of the Act.
Section 2 talks about the amount of Fund which may be appropriated, which says “from and out of the Consolidated Fund of the Union territory of Jammu and Kashmir, there may be paid and applied sums not exceeding those specified in column 3 of the Schedule amounting in the aggregate to the sum of one lakh thirty thousand eight hundred thirty-two crores, twenty-three lakh and eighty-seven thousand rupees towards defraying the several charges which will come in course of payment during the financial year 2021-22 in respect of the services specified in column 2 of the Schedule.”
Section 3 talks about the purposes for which the Fund may be utilised, specified under Schedule, which says that “the sums authorised to be paid and applied from and out of the Consolidated Fund of the Union territory of Jammu and Kashmir by this Act shall be appropriated for the services and purposes expressed in the Schedule in relation to the said year.”