The Lok Sabha has passed the Appropriation Bill 2020-21, authorising the government to draw over Rs 110 lakh crore from the Consolidated Fund of India for its working as well as the implementation of its programs and schemes.
Appropriation Bill gives power to the government to withdraw funds from the Consolidated Fund of India for meeting the expenditure during the financial year.
Post the discussions on Budget proposals and the Voting on Demand for Grants, the government introduces the Appropriation Bill in the Lok Sabha.
It is intended to give authority to the government to withdraw from the Consolidated Fund, the amounts so voted for meeting the expenditure during the financial year.
Consolidated Fund of India:
The Consolidated Fund of India includes revenues, which are received by the government through taxes and expenses incurred in the form of borrowings and loans.
It represents one of the three parts of the Annual Financial Statement with the other two:
the Contingency Fund
All government expenditures are met by consolidated funds except a few made by contingency fund or public fund.
The Consolidated Fund of India was created under Article 266 of the Constitution. It is also considered as the most important part of the financial statement.
Similar to the Centre, every state has its own Consolidated Fund as well.
What goes into Consolidated Fund of India?
All the government revenue generated from taxes, asset sale, earnings from state-run companies, etc go into the Consolidated Fund of India.
The fund gets money from:
Revenue earned in direct taxes such as income tax, corporate tax, etc
Revenue earned in indirect taxes such as GST
Dividends and profits from PSUs (Public Sector Undertakings)
Money earned through government’s general services
This completes two-thirds of the exercise for approval of the Budget for 2020-21.
Lok Sabha and Rajya Sabha had debated on Finance Minister Nirmala Sitharaman's second Budget in the first half of the current session
In the second part, the lower house of Parliament passed the Appropriation Bill.
In the third stage, the Finance Bill, which details the tax proposals, will be discussed and approved.
The house passed the Appropriation Bill, envisaging spending of Rs 110.4 lakh crore during the financial year 2020-21
With Parliament having very limited time for scrutinising the expenditure demands of all the ministries, it takes up discussion on spending or demands for grants for a few ministries during a pre-decided period of time.
Once this is over, a guillotine is applied.
Once the speaker applies the guillotine, all the outstanding demands for grants, whether discussed or not, are put to vote at once and passed.
After this, Appropriation Bill was taken into consideration and passed.