General Budget UPSC Polity ~ Civil Services Self Study

Overview of Budget in Indian Parliament:

The "Budget" word is not mentioned anywhere in the Indian constitution. As per article 112, the term used the " Anual Financial Statement"
It has detailed estimated and expenditure of the government for the financial year
Department of economic affairs under finance ministry is responsible for the preparation of budget
Railway budget was merged with the general budget in 2016
The president is responsible for budget presentation
No amount can be withdrawn from the consolidated fund of India without parliament approval or the passing of the budget
If Budget is not passed in Lok Sabha than Prime Minister along with the council of the minister must resign

The following are the five stages of budget passing:

Budget speech by Finance minister
General discussion and detailed study by estimate committee
Voting for the demand for grants
Appropriation bill passing
Finance bill passing

What is Vote an account?

Generally, two months are required for budget passing. It contains a two-month government expenditure party only, parliament approves 1/6th of the budget amount, it is called vote an account.

What is the interim budget?

It is a temporary budget that is presented by an outgoing government or caretaker government during the transition period of the general election. It contains both the revenue and expenditure part of the government.

What is the appropriation bill?

Through the appropriation, the bill government is able to withdraw money from the consolidated fund of Idia.

Important motions during the budget session:

Guillotine:

Passing of demand of draft at once without discussion

Policy cut Motion:

Reduce the budget of a particular policy or scheme to Rs.1

Token cut:

Reduction of Rs. 100 in particular policy/ scheme budget.

Economic cut:

Reduction of specific amounts in particular policy budget allocation.

The following questions were asked in UPSC and state PCS

1. With reference to the Union Government, consider the following statements: (UPSC 2015)

1. The Department of Revenue is responsible for the preparation of the Union Budget that is presented to the Parliament.

2.No amount can be withdrawn from the Consolidated Fund of India without the authorization from the Parliament of India.

3. All the disbursements made from Public Account also need authorization from the Parliament of India.

Which of the statements given above is/are correct?

(a) 1 and 2 only

(b) 2 and 3 only

(d) 1, 2 and 3

Answer. C

2. Which one of the following is responsible for the preparation and presentation of Union Budget to the Parliament? (UPSC 2010)

(a) Department of Revenue

(b) Department of Economic Affairs

(d) Department of Expenditure

Answer. B

3. All revenues received by the Union Government by way of taxes and other receipts for the conduct of Government business are credited to the (UPSC 2011)

(a) Contingency Fund of India

(b) Public Account

(d) Deposits and Advances Fund

Answer. C

4. The authorization for the withdrawal of funds from the Consolidated Fund of India must come from (UPSC 2011)

(a) The President of India

(b) The Parliament of India

(d) The Union Finance Minister

Answer. B

5. What is the difference between vote-on-account and interim budget? (UPSC 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

Answer. C

6. When the annual Union Budget is not passed by the Lok Sabha: (UPSC 2011)

(a) The Budget is modified and presented again

(b) The Budget is referred to the Rajya Sabha for suggestions

(d) The Prime Minister submits the resignation of Council of Ministers

Answer. D

7. With reference to Indian Parliament, which one of the following is not correct? (UPSC 2004)

a)The Appropriation Bill must be passed by both the Houses of Parliament before it can be enacted into law

b)No money shall be withdrawn from the Consolidated Fund of India except under the appropriation made by the Appropriation Act

c)Finance Bill is required for proposing new taxes but no other Bill/Act is required for making changes in the rates of taxes which are already under operation

d) No Money Bill can be introduced except on the recommendation of the President

Answer. A

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

1.Placing Annual Financial Statement before the Parliament

2. Withdrawal of money from the 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 the program 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 are given below :

(a)1, 2, 3 and 5 only

(b)1, 2 and 4 only

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

Answer. a

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