Lawstreet Journal

The Legal Aspects of Budget in Parliament

Lawstreet Journal 1 Feb 2022 7:00pm

Image courtesy: Lawstreet Journal Executive The Legal Aspects of Budget in Parliament

The budget is a statement of the estimated receipts and expenditure of the Government of India in a financial year, which begins in April and ends on 31 March of the following year.

The genesis of the central Budget in India goes back to 1860 when it was first introduced by then finance minister James Wilson, two years after the transfer of Indian administration from the East India Company to the British Crown. The Budget is presented through 14 documents, some of which are mandated by the Constitution of India, while others are in the nature of explanatory documents.

Here are the constitutional and legal bases of some other key aspects of the Budget:

Annual Financial Statement

Interestingly, the Constitution of India does not specifically use the word Budget.

Article 112 of the Constitution provides for laying before Parliament an 'Annual Financial Statement' providing a statement of the estimated receipts and expenditure for the financial year. This statement evidences the receipts and expenditure of the government in three separate parts under which accounts are maintained. These are: (i) Consolidated Fund of India; (ii) Contingency Fund of India and, (iii) Public Account.

According to constitutional provisions, the Annual Financial Statement has to distinguish expenditure on revenue account from other expenditures. It comprises:

Revenue budget: Proceeds of taxes and interest and dividends on investments made by the government, fees, and other receipts for services rendered by the government.

Capital budget: Capital receipts and payments, including loans, raised by the government from the public, borrowings from Reserve Bank.

Demand for Grants

The estimates… Continue Reading...


Tagged: Budget 2022  
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