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28 March 2023: Finance Bill 2023

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Context: The government completed its budgetary exercise for 2023–2024 as both houses of Parliament approved the Finance Bill 2023. It passed amid protests by the opposition in Rahul Gandhi’s disqualification case.

BUDGET- Every fiscal year, the president causes the budget to be laid before both houses of parliament. The budget is also known as the Government of India’s annual financial statement. The budget is the statement of proposed expenditures and receipts by the GoI for the following financial year.

The budget consists of two parts, one related to expenditure and the other to revenue. The revenue portion is known as the FINANCE BILL, and the expenditure portion is known as the APPROPRIATION BILL.

The Finance Bill primarily proposes the taxes for the following financial year, and the Appropriation Bill includes the Demand for Grants of various ministries and the charged expenditure.

STAGES –

  1. The budget is presented in parliament, but there is no discussion on the day of its delivery.
  2. GENERAL DISCUSSION AND VOTE ON ACCOUNT: General discussion is continuous in both houses of parliament, and there is a passage of the Vote on Account.

Vote on Account: As a whole process of budgeting, beginning with its presentation and ending with the passing of appropriation and finance bills, the process generally goes beyond the current financial year. There is a provision in the constitution empowering the Lok Sabha to make any grant in advance by approving a vote on account, which will allow the government to carry on with the expenditure until the voting on the appropriation bill and finance bill is complete.

  1. Scrutiny by Departmental Committees: After the general discussion, the departmental-related standing committees (DRSCs) of Parliament examine and discuss in detail the demands for grants of the concerned ministers and prepare reports on them. These reports are submitted to both Houses of Parliament for consideration, and then these are discussed and voted upon in the Lok Sabha.
  2. Voting on Demands for Grants (demand + vote = grant)
  • A demand becomes a grant after it has been duly voted.
  • The voting on demands for grants is done by the Lok Sabha.
  • During this stage, the members of Parliament can discuss the details of the budget. They can also move motions to reduce any demand for grants.
  • Cut Motion: During the discussion of the budget, the Lok Sabha members can introduce various cut motions, which are the instruments to exercise financial control over the executive branch available to the Lok Sabha.

  1. Passage of Appropriation Bill: This Act authorizes the payments from the Consolidated Fund of India, which means that the government cannot withdraw money from the Consolidated Fund of India till the enactment of the appropriation bill.

6. Passage of the Finance Bill: The Finance Bill is introduced to give effect to the financial proposals of the Government of India for the following year. According to the Provisional Collection of Taxes Act of 1931, the Finance Bill must be enacted (i.e., passed by the Parliament and assented to by the president) within 75 days. The Finance Act legalizes the income side of the budget and completes the process of enacting the budget.