Appropriation Bill, Provisions, Procedure, President’s Role

The Appropriation Bill authorises the Government of India to withdraw money from the Consolidated Fund of India to meet expenditure for a financial year, as provided under Article 114 of the Constitution. It is introduced in the Lok Sabha after the Budget is discussed and Demands for Grants are approved, and its passage is essential for the functioning of the government. 

What is an Appropriation Bill?

An Appropriation Bill is a legislative proposal that authorizes the government to withdraw funds from the Consolidated Fund of India to meet its expenditure. It is introduced in the Lok Sabha after the annual budget is presented and approved. Without the passage of this bill, government departments cannot legally spend money, making it a critical tool for financial accountability.

Legal Provisions Governing the Appropriation Bill

The Appropriation Bill is governed primarily by Article 114 of the Indian Constitution, which states that no money can be withdrawn from the Consolidated Fund of India except under appropriation made by law. Key legal aspects include:

• Article 114(3) of the Constitution mandates that no money can be withdrawn from the Consolidated Fund of India except under an appropriation made by law passed by Parliament.
• Article 110 classifies the Appropriation Bill as a Money Bill, allowing its introduction only in the Lok Sabha and limiting the Rajya Sabha to making recommendations.
• Article 116 provides for the Vote on Account, enabling the Lok Sabha to grant funds in advance when the Appropriation Bill is yet to be enacted.
• The Speaker of the Lok Sabha has the final authority to decide whether a bill qualifies as a Money Bill, and this decision is binding on both Houses.

‹ ›

Procedure for Passing the Appropriation Bill

The Appropriation Bill is a vital part of the budgetary process, as it grants legal authority to the government to incur expenditure for a financial year. It is introduced only after Parliament has discussed the Budget and approved the Demands for Grants.

• The Appropriation Bill is introduced in the Lok Sabha by the Finance Minister after the completion of Voting on Demands for Grants.
• It includes all expenditure charged on the Consolidated Fund of India, both voted and charged expenditures, for the financial year.
• The Lok Sabha discusses the bill, but no amendments can be proposed that alter the amount or purpose of any grant.
• Once passed by the Lok Sabha, the bill is transmitted to the Rajya Sabha, which can only make recommendations and must return the bill within 14 days.
• The Lok Sabha may accept or reject the recommendations made by the Rajya Sabha.
• After parliamentary approval, the bill is sent to the President of India for assent.
• On receiving presidential assent, the bill becomes the Appropriation Act, authorising the government to withdraw funds from the Consolidated Fund of India.

Appropriation Bill Amendment

No amendment can be moved to an Appropriation Bill that seeks to change the amount or purpose of any grant, or to vary the expenditure charged on the Consolidated Fund of India. The Speaker of the Lok Sabha has the final authority to decide whether an amendment is admissible, and this decision is binding. 

Any amendment proposing the omission of a demand already voted by the House is considered out of order. In all other respects, the legislative procedure followed for an Appropriation Bill is the same as that applicable to other Money Bills.

Role of the President in the Appropriation Bill

The President of India plays a constitutionally mandated role in the Appropriation Bill, ensuring that government expenditure receives formal executive approval. Although the President does not participate in the drafting or discussion of the bill, the assent of the President is essential for the bill to acquire legal validity.

After the Appropriation Bill is passed by both Houses of Parliament, it is presented to the President for assent under Article 111 of the Constitution. Only after receiving the President’s assent does the bill become an Appropriation Act, authorising the government to withdraw money from the Consolidated Fund of India.

Difference between Appropriation Bill and Finance Bill

The Appropriation Bill provides legal authority to withdraw money from the Consolidated Fund of India to meet government expenditure, while the Finance Bill deals with raising revenue through taxation and other financial measures. The difference between the Appropriation Bill and Finance Bill is given below.

UPSC Prelims PYQs

1. Which of the following are the methods of Parliamentary control over public finance in India? (2012)

1. Placing Annual Financial Statement before the Parliament
2. Withdrawal of moneys from Consolidated Fund of India only after passing the Appropriation Bill
3. Provisions of supplementary grants and vote-on account
4. A periodic or at least a mid-year review of programme of the Government against macroeconomic forecasts and expenditure by a Parliamentary Budget Office
5. Introducing Finance Bill in the Parliament

Select the correct answer using the codes given below:

(a) 1, 2, 3 and 5 only

(b) 1, 2 and 4 only

(c) 3, 4 and 5 only

(d) 1, 2, 3, 4 and 5

Ans: (a)

1. What is the difference between “vote-on-account” and “Interim Budget”? (2011)

1. The provision of a “vote-on-account” is used by a regular Government while an “interim budget” is a provision used by a caretaker Government.
2. A “vote-on-account” only deals with the expenditure in the Government’s budget, while an “interim budget” includes both expenditure and receipts.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only 

(c) Both 1 and 2

(d) Neither 1 nor 2

Ans: (b)