Annual financial statement

Article 92, Draft Constitution 1948

(1) The President shall in respect of every financial year cause to be laid before both the Houses of Parliament a statement of the estimated receipts and expenditure of the Government of India for that year, in this Part of this Constitution referred to as the “annual financial statement”.

(2) The estimates of expenditure embodied in the annual financial statement shall show separately-

(a) The sums required to meet expenditure described by this Constitution as expenditure charged upon the revenues of India; and

(b) The sums required to meet other expenditure proposed to be made from the revenues of India, and shall distinguish expenditure on revenue account from other expenditure.

(3) The following expenditure shall be expenditure charged on the revenues of India-

(a) The emoluments and allowances of the President and other expenditure relating to his office;

(b) The emoluments and allowances of the Chairman and the Deputy Chairman of the Council of States and the Speaker and the Deputy Speaker of the House of the People;

(c) Debt charges for which the Government of India is liable including interest, sinking fund charges and redemption charges, and other expenditure relating to the raising of loans and the service and redemption of debt;

(d) (i) The salaries, allowances and pensions payable to or in respect of judges of the Supreme Court;

(ii) The pensions payable to or in respect of judges of the Federal Court;

(iii) The pensions payable to or in respect of judges of any High Court which exercises or immediately before the commencement of this Constitution exercised jurisdiction within any area included in the States for the time being specified in Parts I and II of the First Schedule;

(e) Any sums required to satisfy any judgment, decree or award of any court or arbitral tribunal; and

(f) Any other expenditure declared by this Constitution or by Parliament by law to be so charged.

Article 112, Constitution of India 1950

(1) The President shall in respect of every financial year cause to be laid before both the Houses of Parliament a statement of the estimated receipts and expenditure of the Government of India for that year, in this Part referred to as the “annual financial statement”.

⁠(2) The estimates of expenditure embodied in the annual financial statement shall show separately—

(a) the sums required to meet expenditure described by this Constitution as expenditure charged upon the Consolidated Fund of India; and

(b) the sums required to meet other expenditure proposed to be made from the Consolidated Fund of India, and shall distinguish expenditure on revenue account from other expenditure.

(3) The following expenditure shall be expenditure charged on the Consolidated Fund of India—

(a) the emoluments and allowances of the President and other expenditure relating to his office;

(b) the salaries and allowances of the Chairman and the Deputy Chairman of the Council of States and the Speaker and the Deputy Speaker of the House of the People;

(c) debt charges for which the Government of India is liable including interest, sinking fund charges and redemption charges, and other expenditure relating to the raising of loans and the service and redemption of debt;

(d) (i) the salaries, allowances and pensions payable to or in respect of Judges of the Supreme Court;

(ii) the pensions payable to or in respect of Judges of the Federal Court;

(iii) the pensions payable to or in respect of Judges of any High Court which exercises jurisdiction in relation to any area included in the territory of India or which at any time before the commencement of this Constitution exercised jurisdiction in relation to any area included in a Province corresponding to a State specified in Part A of the First Schedule;

(e) the salary, allowances and pension payable to or in respect of the Comptroller and Auditor-General of India;

(f) any sums required to satisfy any judgment, decree or award of any court or arbitral tribunal;

(g) any other expenditure declared by this Constitution or by Parliament by law to be so charged.

Draft Article 92 (Article 112) was debated on 8 and 10 June 1949, and 13 October 1949. It directs the President of India to present an Annual Financial Statement of the Government of India’s expenditure – popularly known as the Union Budget – to the Parliament of India. It details what such a statement must contain and how it should be presented.

A member moved an amendment that would, in addition to the President, also allow the Finance Minister to present the Annual Financial Statement. He pointed out that even though the President was the head of the Executive, the Finance Minister should be given the opportunity to present the Budget – as he/she directly led the financial administration of the country. Further, he stressed on retaining ‘complete and exclusive supremacy’ of the Parliament on financial matters.

Additionally, this member sought to give the House of the People primacy over the Budget. He argued that equality between both the Houses on finance matters ‘fundamentally opposed to the basic idea of the Constitution’. Once the Budget was finalised, the Council of the States could be given the copy of the Budget. This would ensure that popular representative will of the people determined the financial decisions of the nation.

This member was keen to charge the salaries and allowances of the Ministers and the Members of the Parliament to the Consolidated Fund of India. He argued that clause 3 provides for salaries of a number of members of the constitutional bodies to be considered within the Consolidated Fund, Ministers and members of the Parliament must be treated in the same category.

The Assembly rejected all these proposals. It adopted the Article with changes as suggested by the Drafting Committee on 10 June 1949.