Appropriation Bill

The Appropriation Bill authorises the government to withdraw funds from the Consolidated Fund of India to meet its expenditure obligations for a financial year. It ensures that no money can be spent from the Consolidated Fund without the approval of Parliament, thereby upholding the principle of parliamentary control over public finance. The passage of the Appropriation Bill marks a critical stage in the financial administration of the Union government under the Indian Constitution.

Constitutional Basis

The legal foundation for the Appropriation Bill is provided under Article 114 of the Constitution of India. It mandates that:

“No money shall be withdrawn from the Consolidated Fund of India except under appropriation made by law passed in accordance with the provisions of this article.”

Thus, the Appropriation Bill serves as the statutory authority that enables the executive to utilise funds for the purposes and amounts approved by Parliament. It follows the passage of the Demands for Grants, which are voted upon by the Lok Sabha after detailed discussion on the annual budget.

Stages in the Budgetary Process

The Appropriation Bill forms part of a larger and constitutionally defined budgetary process:

1. Presentation of the Annual Financial Statement:
   • Under Article 112, the Union Budget (Annual Financial Statement) is presented by the Finance Minister in Parliament, outlining estimated receipts and expenditure for the upcoming financial year.
2. Discussion and Voting on Demands for Grants:
   • The Lok Sabha discusses the budget in detail, and individual Demands for Grants—representing specific expenditures of different ministries and departments—are voted upon.
   • Only the Lok Sabha has the power to vote on these demands, as they involve expenditure from the Consolidated Fund.
   • The Rajya Sabha can discuss the budget but not amend or vote on it.
3. Introduction of the Appropriation Bill:
   • After the Demands for Grants are approved, the government introduces the Appropriation Bill to seek formal authorisation to withdraw funds from the Consolidated Fund of India.
   • The bill covers both voted expenditure (approved by the Lok Sabha) and charged expenditure (which is not subject to vote, such as the salary of the President, judges of the Supreme Court, and the Comptroller and Auditor General).
4. Passage of the Bill:
   • The Appropriation Bill must be passed by both Houses of Parliament. However, it is regarded as a Money Bill under Article 110, meaning the Rajya Sabha cannot reject or amend it but may make recommendations, which the Lok Sabha may accept or reject.
   • Once passed, the bill is sent to the President of India for assent.
5. Appropriation Act:
   • Upon receiving presidential assent, the bill becomes the Appropriation Act, granting the government legal authority to draw the required funds for the specified purposes during the financial year.

Structure and Content of the Appropriation Bill

Each Appropriation Bill specifies:

• The amount of money required for each ministry, department, or service.
• The purpose for which the money is to be spent.
• A distinction between voted and charged expenditure.

The Bill also includes any supplementary, additional, or excess grants required during the financial year. In such cases, separate Appropriation Bills, known as Supplementary Appropriation Bills, are introduced to authorise extra expenditure.

Types of Appropriation Bills

1. Annual Appropriation Bill:
   • The main bill passed after the annual budget discussions for the new financial year.
2. Supplementary Appropriation Bill:
   • Introduced when the amount authorised earlier proves insufficient or when additional expenditure becomes necessary.
3. Excess Appropriation Bill:
   • Introduced after the end of the financial year to regularise expenditure that exceeded the amount originally authorised.
4. Vote on Account:
   • When the passage of the Appropriation Bill is delayed, Parliament may pass a Vote on Account under Article 116, permitting temporary withdrawal of funds to meet urgent expenses for a limited period (usually two months).

Significance and Purpose

The Appropriation Bill is a vital component of India’s financial control mechanism. Its significance can be summarised as follows:

• Ensures Parliamentary Control: It embodies the constitutional principle that public money can only be spent with the approval of the people’s representatives.
• Legalises Expenditure: It provides the formal legal authority to withdraw funds from the Consolidated Fund of India.
• Enforces Financial Discipline: By limiting expenditure to the amounts and purposes approved by Parliament, it prevents misuse of public resources.
• Supports Accountability: Enables Parliament and the Comptroller and Auditor General (CAG) to hold the executive accountable for public spending.

Role of the Rajya Sabha

As a Money Bill, the Appropriation Bill enjoys special procedural privileges under Article 110:

• The Rajya Sabha cannot amend or reject the Bill but can only offer recommendations.
• The Lok Sabha may accept or decline these recommendations.
• If the Rajya Sabha does not return the Bill within 14 days, it is deemed to have been passed by both Houses.

This framework reinforces the financial supremacy of the Lok Sabha, reflecting the democratic principle that control over taxation and expenditure must rest with the directly elected chamber.

Supplementary and Excess Grants

During the financial year, unforeseen circumstances may require expenditure beyond the approved budget. In such cases:

• The government presents Supplementary Demands for Grants to the Lok Sabha.
• These are followed by Supplementary Appropriation Bills to obtain legislative approval for the additional funds.
• If excess expenditure is discovered after the fiscal year ends, it must be regularised through an Excess Appropriation Bill, following examination by the Public Accounts Committee (PAC).

Historical and Practical Context

The Appropriation Bill has been a consistent feature of India’s parliamentary democracy since independence. Every year, following the passage of the Union Budget, the Appropriation Bill is introduced in the Lok Sabha by the Finance Minister. For example, the Appropriation Act, 2025, authorised the withdrawal of funds for the Union government’s operations for the fiscal year 2025–26.
At the state level, similar procedures apply under Articles 204–206 of the Constitution, with each State Legislature passing its own Appropriation Bill to authorise expenditure from the Consolidated Fund of the State.

Importance in Democratic Governance

The Appropriation Bill exemplifies the core principle of constitutional governance—that the executive cannot spend public money without legislative sanction. It ensures transparency and accountability in fiscal administration, upholding the rule of law in financial matters.
By compelling the government to seek parliamentary approval for every rupee withdrawn from the Consolidated Fund, the Appropriation Bill strengthens the financial sovereignty of Parliament and the public trust in democratic institutions.