APPENDIX A
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STATUTORY PROVISIONS RELATING TO BUDGET
PROCEDURE, ETC.
1. The constitution of India.
Articles 150,202 - 209, 266 - 267, 282 - 284 and 293
2.Rules of Procedure and Conduct of Business of the Uttar Pradesh Legislative Assembly Rules 184 - 189 and 193 - 200.
3.Rules of Procedure and Conduct of Business of the Uttar Pradesh Legislative Council Rules 210 - 211
4. Uttar Pradesh Rules of Business, 1955
Part I - Disposal of Business
Rule 7. Part III - Departmental Disposal of Business - B- Finance Department Rules 31 - 33 and 34(3).
5. The Uttar Pradesh Secretariat Instructions, 1955:
Chapter IV – Departmental
Business - A - General and C - Finance Department. Instructions 8(1) and 12 - 15.
1. Extracts from the Constitution of India
150.Form of accounts of the union and of the state:- The accounts of the Union and of the States shall be kept in such form as the President may, on the advice of the Comptroller and Auditor-General of India, prescribe.
(Ref. :-The Constitution of India is Federal in character, therefore, major heads of account to minor heads of account and its codes are common to Government Of India, all States & Union territories)
Procedure in Financial Matters
202. Annual Financial Statement:
(1)The Governor shall in respect of every financial year cause to be laid before the House or Houses of the Legislature of the State a statement of the estimate receipts and expenditure of the State 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 the State; and
b. the sums required to meet other expenditure proposed to be made from the Consolidated Fund of the State ;and
c. shall distinguish expenditure on revenue account from other expenditure.
(3)The following expenditure shall be expenditure charged on the Consolidated Fund of each State—
a. The emoluments and allowances of the Governor and other expenditure relation to this office;
b. The salaries and allowances of the Speaker and the Deputy Speaker of the Legislative Assembly, and, in the case of a State having a Legislative Council, also of the Chairman and the Deputy Chairman of the Legislative Council;
c. Debt charges for which the State is liable including interest sinking fund charges and redemption charges, and other expenditure relation to the raising of loans and the service and redemption of debt;
d. Expenditure in respect of the salaries and allowances of Judges of any High Court;
e. Any sums required to satisfy and judgment, decree or award of any court or arbitral tribunal;
f. Any other expenditure declared by this Constitution, or by the Legislature of the State by law, to be so charged.
203. Procedure in Legislature with respect to Estimates:
(1) So much of the estimates as relates to expenditure charged upon the Consolidated Fund of a State shall not be submitted to the vote of the Legislative Assembly, but nothing in this clause shall be construed as preventing the discussion in the Legislature of any of those estimates.
(2) So much of the said estimated as related to other expenditure shall be submitted in the form of demands for grants to the Legislative Assembly, and the Legislative Assembly shall have power to assent, or to refuse to assent, to any demand, or to assent to any demand subject to a reduction of the amount specified therein.
(3) No demand for a grant shall be made except on the recommendation of the Governor.
204. Appropriation Bills:
(1) As soon as may be after the grants under Article 203 have been made by the Assembly, there shall be introduced a Bill to provide for the appropriation out of the Consolidated Fund of the State of all money required to meet—
a. The grants so made by the Assembly; and
b. The expenditure charged on the Consolidated Fund of the State but not exceeding in any case the amount shown in the statement previously laid before the House or Houses.
(2) No amendment shall be proposed to any such Bill in the House either House of the Legislature of the State which will have the effect of varying the amount or altering the destination of any grant so made or of varying the amount of any expenditure charged on the Consolidated Fund of the State, and the decision of the person presiding as to whether an amendment is inadmissible under this clause shall be final.
(3) Subject to the provisions of Articles 205 and 206 no money shall be withdrawn from the Consolidated Fund of the State except under appropriation made by law passed in accordance with the provisions of this Article.
205. Supplementary, additional or excess grants
(1) The Governor shall—
(a) If the amount authorized by any law made in accordance with the provisions of Article 204 to be expended for a particular service for the current financial year is found to be insufficient for the purposes of that year or when a need has arisen during the current financial year for supplementary or additional expenditure upon some new service not contemplated in the annual financial statement for that year, or
(b) If any money has been spent on any service during a financial year in excess of the amount granted for that service and for that year.
Cause to be laid before the House or the Houses of the Legislature of the Statement showing the estimated amount of that expenditure or cause to be presented to the Legislative Assembly of the State a demand for such excess, as the case may be.
(2) The provisions of Articles 202, 203 and 204 shall have effect in relation to any such statement and expenditure or demand and also to any law to be made authorizing the appropriation of money out of the Consolidated Fund of the State to meet such expenditure or the grant in respect of such demand as they have effect in relation to the annual financial statement and the expenditure mentioned therein or to a demand for a grant and the law to be made for the authorization of appropriation of money out of the Consolidated Fund of the State to meet such expenditure or grant.
206. Votes on Account, Votes of Credit and Exceptional Grants:
(1) Notwithstanding anything in the foregoing provisions of this chapter, the Legislative Assembly of a state shall have power—
a. To make any grant in advance in respect of the estimated expenditure for a part of any financial year pending the completion of the procedure prescribed in Article 203 for the voting of such grant and the passing of the law in accordance with the provisions of Article 204 in relation to that expenditure;
b. To make a grant for meeting an unexpected demand upon the resources of the State when on account of the magnitude or the indefinite character of the service the demand cannot be stated with the details ordinarily given in an annual financial statement;
c. To make an exceptional grant which forms no part of the current service of any financial year; and the Legislature of the State shall have power to authorize by law the withdrawal of money from the Consolidated Fund of the State for the purposes for which the said grants are made.
(2) The provisions of Articles 203 and 204 shall have effect in relation to the making of any grant under clause (1) and to any law to be made under that clause as they have effect in relation to the making of a grant with regard to any expenditure mentioned in the annual financial statement and the law to be made for the authorization of appropriation of money out of the Consolidated Fund of the State to meet such expenditure.
207. Special Provisions as to Financial Bills:
(1) A Bill or amendment making provision for any of the matters specified in sub-clauses (a) to (f) of clause (1) of Article 199 shall not be introduced or moved except on the recommendation of the Governor, and a Bill making such provision shall not be introduced in a Legislative Council:
Provided that no recommendation shall be required under this clause for the moving of an amendment making provision for the reduction or abolition of any tax.
(2) A Bill or amendment shall not be deemed to make provision for any of the matters aforesaid by reason only that it provides for the imposition of fines or other pecuniary penalties, or for the demand or payment of fees for licenses or fees for services rendered, or by reason that it provides for the imposition, abolition, remission, alternation or regulation of any tax by any local authority or body for local purposes.
(3) A Bill which, if enacted and brought in to operation, would involve expenditure from the Consolidated Fund of a State shall not be passed by a House of the Legislature of the State unless the Governor has recommended to that House the consideration of the Bill.
Procedure Generally
208. Rules of Procedure:
(1) A House of the Legislature of a State may make rules for regulating, subject to the provisions of this Constitution, its procedure and the conduct of its business.
(2)
(3) In a State having a Legislative Council the Governor, after consultation with the Speaker of the Legislative Assembly and the Chairman of the Legislative Council, may make rules as to the procedure with respect to communications between the two Houses.
209. Regulation by law of Procedure in the Legislature of the State in relation to Financial Business: The Legislature of a State may, for the purpose of the timely completion of financial business, regulate by a law the procedure of, and the conduct of, business in the House or Houses of the Legislature of the State in relation to any financial matter or to any Bill for the appropriation of money out of the Consolidated Fund of the State, and, if and so far as any provision of any law so made is inconsistent with any rule made by the House or either House of the Legislature of the State under clause (1) of Articles 208 ****, such provision shall prevail.
266. Consolidated Funds and Public Account of India and of the States:
(1) Subject to the provisions of Article 267, and to the provision of this chapter with respect to the assignment of the whole or part of the net proceeds of certain taxes and duties to States ****, all revenues received by the Government of a State, all loans raised by that Government by the issue of treasury bills, loans or ways and means advances and all money received by that Government in repayment of loans shall form one consolidated fund to be entitled "the Consolidated Fund of the State."
(2) All other public money received by or on behalf of the **** Government of a State shall be credited to the public **** account of the State.
(3) No money out of the Consolidated Fund of **** a State shall be appropriated except in accordance with law and for the purposes and in the manner provided in this Constitution
267. Contingency Fund:
(1) The Legislature of a State may by law establish a Contingency Fund in the nature of an imprest to be entitled "the Contingency Fund of the State" into which shall be paid from time to time such sums as may be determined by such law, and the said Fund shall be placed at the disposal of the Governor of the State to enable advances to be made by him out of such Fund for the purposes of meeting unforeseen expenditure pending authorization of such expenditure by the Legislature of the State by law under Article 205 or Article 206.
Miscellaneous Financial Provisions
282. Expenditure defrayable by the Union or a State out of its Revenues: The Union or a State may make any grants for any public purpose, notwithstanding that the purpose is not one with respect to which Parliament or the Legislature of the State, as the case may be, may make laws.
283. Custody, etc., of Consolidated Funds, Contingency Funds and money credited to the Public Accounts:
(1) The custody of the Consolidated Fund of a State and the Contingency Fund of a State, the payment of money into such Funds, the withdrawal of money there from, the custody of public money other than those credited to such Funds received by or on behalf of the Government of the State, their payment into the public account of the State and the withdrawal of money from such account and all other matters connected with or ancillary to matters aforesaid shall be regulated by a law made by the Legislature of the State, and, until provision in that behalf is so made, shall be regulated by rules made by the Governor of the State.
284. Custody of suitors’ deposits and other money received by Public Servants and Courts: All money received by or deposited with—
(a) any officer employed in connection with the affairs of a state in his capacity as such, other that revenues or public money raised or received by the **** Government of the State **** or
(b) any court within the territory of India to the credit of any cause, matter, account or persons, shall be paid into the public account of **** the State.
BORROWING
293. Borrowing by States:
(1) Subject to the provisions of this articles, the executive power of a State extends to borrowing within the territory of India upon the security of the Consolidated Fund of the State within such limits, if any, as may from time to time be fixed by the Legislature of such State by law and to the giving of guarantees within such limits, if any, as may be so fixed.
(2) The Government of India may, subject to such conditions as may be laid down by or under any law made by Parliament, make loans to any State or, so long as any limits fixed under Article 292 are not exceeded, give guarantees in respect of loans raised by any state, and any sums required for the purpose of making such loans shall be charged on the Consolidated Fund of India.
(3) A State may not without the consent of the Government of India raise any loan if there is still outstanding any part of a loan which has been made to the State by the Government of India or by its predecessor Government, or in respect of which a guarantee has been given by the Government of India or by its predecessor Government.
(4) A consent under clause (3) may be granted subject to such conditions, if any, as the Government of India may think fit to impose.
1. Extracts from the Rules of Procedure and Conduct of Business of the U.P. Legislative Assembly, 1958
PROCEDURE IN FINANCIAL MATTERS
A. Budget
184. Budget and its Presentation: The annual financial statement or the statement of the estimated receipts and expenditure of the State in respect of every financial year (hereinafter referred to as the Budget) shall be presented to the Assembly on such day as the Governor may appoint.
185. Discussion of Budget: No discussion on the Budget takes place on the day on which it is presented to the Assembly.
186. Demands for Grants:
(1) No demand for grant shall be made except on the recommendation of the Governor.
(2) A separate demand shall ordinarily be made in respect of the grant proposed for each department of the Government: Provided that the Finance Minister may include in one-demand grants proposed for two or more departments, or make a demand in respect of expenditure, which cannot readily be classified under particular departments.
(3) Each demand shall contain, first a statement of the total grant proposed, and then a statement of the detailed estimate under each grant divided into items.
(4) Subject to these rules, the Budget shall be presented in such form, as the Finance Minister may, after considering the suggestions, if any, of the Estimates committee consider best.
187. Stages of Budget Debate:
The Budget shall be dealt with by the Assembly in two stages, namely—
i. a general discussion, and
ii. the voting of demands on grants.
188.General Discussion:
(1) On days to the appointed by the Speaker which shall not be earlier than two days subsequent to the day on which the Budget is presented and for such time thereafter, which shall ordinarily be five days as the Speaker may allot for this purpose, the House shall be at liberty to discuss the Budget as a whole or any question of principle involved therein, but no motion shall be moved at this stage, nor shall the Budget be submitted to the vote of the House.
(2) The Finance Minister shall have a general right of reply at the end of the discussion.
(3) The Speaker may, if he thinks fit, prescribe a time limit for speeches.
189.Voting on Demands:
(1) The voting on demands for grants shall take place on such days (not exceeding 24 days) as the speaker may, in consultation with the Leader of the Opposition, may determine.
(2) The demand for grants shall be presented in such order and discussions shall continues for such time within the period allotted under sub-role (1) as the Leader of the House, in consultation with the Leader of the Opposition, may determine.
(3)
(4) Motions may be moved at this stage to reduce or omit any grant but not to increase or alter the destination of a grant.
(5) No amendment to motions to reduce any grant shall be permissible.
(6) When several motions relating to the same demand are made they shall be discussed in the order in which the heads to which they relate appear in the Budget.
(7) On the last day of the days allocated under sub-rule (1), half an hours or so before the close of the sitting of the day, the Speaker shall forth with put every question necessary dispose of all the outstanding matters in connection with the demands for grants ; and this procedure shall not be anticipated by any motion for adjournment or be interrupted in any manner whatsoever, nor shall any dilatory motion be moved in regard there to.
193. Votes on credit and exceptional grants:
(1) Notwithstanding anything contained in the preceding rules, motions may be made for grants in advance in respect of the estimated expenditure for unexpected and exceptional grants under Article 206.
(2) Such demands shall be dealt with by the Assembly in the same manner as demands for grants in connection with the Budget and the rules on the subject shall apply to such demands subject to such modifications, as the Speaker may deem necessary.
194. Votes on Account:
(1) A motion for vote on account shall state the total sum required, and the various needed for each department or service or item of expenditure which compose that sum shall be stated in a schedule appended to the motion.
(2) Amendments may be moved for the reduction of the whole grant or for the reduction or omission of the items whereof the grant is composed.
(3) Discussion of a general nature shall be allowed on the motion or any amendments moved thereto, but the details of the grant shall not be discussed further than is necessary to develop the general points.
(4) In other respects, a motion for vote on account shall be dealt with in the same way as it was a demand for grant.
195. Supplementary or additional grants or grants for excess expenditure:
(1) The Governor may allot one or more days for presentation of a statement of demands for grants in respect of supplementary or additional or excess expenditure under Article 205.
(2) The Speaker may, from time to time, in consultation with the Leader of the House, allot one or more days for the discussion and voting of such demands. In such cases the same procedure will be followed as is laid down in rules 186, 187, 189, … * * * subject to such modifications as the Speaker may deem necessary.
196. Scope of discussion of Supplementary grants: The debate on the supplementary grants shall be confined to its items and no discussion shall be raised on the original grants nor on the policy underlying them save in so far as it may be necessary to explain or illustrate the particular items under discussion.
197. Token grant: When funds to meet proposed expenditure on a new service or scheme can be made available by re-appropriation, a demand for the grant of a token sum may be submitted to the vote of the House, and if the House assents to the demand, funds may be so made available.
B. Appropriation Bill
198.Appropriation Bill:
(1) Subject to the provisions of the Constitution, the procedure in regard to an Appropriation Bill shall be the same as for Bills generally but with such modifications as the Speaker may consider necessary:
Provided that no amendment shall be proposed to an Appropriation Bill, which will have the effect of varying the amount or altering the destination of any grant, made under Article 203.
(2) The Speaker may suspend the operation of any rule for the timely passing of such Bills.
199. Time Limit for disposal of Financial Business: In addition to the powers exercisable by the Speaker under these rules, he may exercise all powers necessary for the purpose of the timely completion of all financial business and may, in particular, allot time for the disposal of various kinds of such business and when the time is so allotted, he shall, at the appointed hour. Put every question necessary to dispose of all the outstanding matters in connection with the stage or stages for which the time has been allotted.
Explanation. – Financial business includes any business, which the Speaker holds as coming within this category under the Constitution.
200. Publication of Appropriation and Finance Accounts and Audit Reports: As soon as may be practicable after the Appropriation and Finance Accounts and Audit Reports thereon have been laid on the Tables of the Legislature, the Secretary shall issue a notification declaring them to be published for general information.
(3) Extracts from the Rules of Procedure and Conduct of Business of the Uttar Pradesh Legislative Council
XVI—Discussion on Financial Statements:
210. Budget: The annual financial statement of the State, hereinafter referred to as "The Budget," or a statement of supplementary or additional demands for grants, shall be presented to the Council on such days as the Governor may appoint and in such from as the Finance Minister may consider suitable for its consideration by the Council.
211. General Discussion:
(1) On a day or days to be appointed by the Chairman in consultation with the Leader of the House, subsequent to the day on which the Budget or a statement of supplementary, additional or excess demands for grants is presented and for such time as the Chairman, in consultation with the Leader of the House, may allot for this purpose, the Council shall be at liberty to discuss the Budget or a statement of supplementary or additional demands for grants as a whole or any question of principle involved therein, but no motion shall be moved no shall the Budget be submitted to the vote of the Council :
Provided that no discussion on the Budget shall take place earlier than three clear days after the day on which it is presented to the Council.
(2)The Finance Minister shall have a general right to reply at the end of discussion:
Provided that the Chairman may allow any Minister or any member to exercise such general right of reply.
(3) The Chairman may, if he thinks fit, prescribe a time limit for speeches at any stage of the discussion.
Extracts from the Uttar Pradesh Rules of Business and Secretariat Instructions, 1955.
The Uttar Pradesh Rules of Business
7. (1) No Department shall without previous consultation with the Finance Department authorize any orders (other than orders pursuant to any general delegation made by the Finance Department) which—
a. either immediately or by their repercussion, will affect the finances of the State, or which, in particular.
(i) involve any grant, of land or assignment of revenue or concession, grant lease or license of mineral or forest rights or a right to water, power or any easement or privilege in respect of such concession ; or
(ii) in any way involve any relinquishment of revenue ; or
b. relate to the number or grading or cadre of posts or the emoluments or other conditions of service or posts.
(2) No proposal which requires the previous consultation of the Finance Department under this rule, but in which the Finance Department has not concurred, may be proceeded with unless a decision to that effect has been taken by the *Council.
(3) No re-appropriation shall be made by any Department other than the Finance Department, except in accordance with such general delegation as the Finance Department may have made.
(4) Except to the extent that power may have been delegated to the Departments under rules approved by the Finance Department, every order of an administrative department conveying a sanction to be enforced in audit shall be communicated to the audit authorities by the Finance Department.
(5) Nothing in this rule shall be construed as authorizing any Department, including the Finance Department, to make re-appropriations from on grant specified in the Appropriation Act of another such grant.
31. The Finance Department shall be consulted before the issue of orders upon all proposals, which affect the finance of the State and in particular—
(a)proposals to add any post or abolish any post from the public service or to vary the emoluments of any post ;
(b)proposals to sanction an allowance or special or personal pay for any post or class of posts or to any servant of the Government of the State ;
(c)proposals involving abandonment of revenue or involving an expenditure for which no provision has been made in the Appropriation Act.
32. The views of the Finance Department shall be brought to the permanent record of the Department to which the case belongs and shall from part of the case.
*Reference is to the Council of Ministers.
33. The Finance Department may by general or special order prescribe cases in which its assent may be presumed to have been given.
34. (3) The finance Department may make rules to govern financial procedure in general in all Departments and to regulate the business of the Finance Department and the dealings of other Departments with the Finance Department.
The Uttar Pradesh Secretariat Instructions
8. (1) When consultation with the Finance Department is necessary in a case under the rules or under these Instructions, the following procedure shall be followed:
i. the Secretary (or an officer subordinate to him) in the Administrative Department shall refer the case to the Finance Department or an officer of the Finance Department before submitting the case for consideration of the Minister in charge.
ii. On receipt of the views of the Finance Department the case shall be disposed of in accordance with the advice of the Finance Department after reference of the case, if necessary to the Minister in charge, and if the Finance Department have so advise, also to the Minister in charge of the Finance Department. (The reference to the Finance Minister at this stage will of course be made by the Finance Department themselves).
iii. In case the Administrative Department is unable to accept the advice of the Finance Department, the case shall be referred by the Administrative Department to the Minister in charge, who, if he upholds the viewpoint of the Administrative Department, shall refer the case to the Minister in charge of the Finance Department does not agree with the views of the Minister in charge and if the Minister in charge still adheres to his views, the disagreement will be resolved by the Chief Minister or decided by the Cabinet, as the circumstances of the case may require.
12. The Finance Department shall be specially charged with the following functions, namely:
i. It shall in consultation with the Appointment Department frame rules regulation the pay, leave and pension of persons in the service of the State Government, and rules regulating the number, grading or cadre and emoluments of posts under the State Government, and also be responsible for seeing that these rules are properly applied.
ii. It shall be in charge of account relating to loans granted by the State Government, and shall advise on the financial aspects of all transaction relating to such loans.
iii. It shall be responsible for the safety and proper employment of the Famine Relief Fund and for the maintenance of the accounts relating to provident funds, deposits and advances.
iv. It shall examine and report on all proposals for the increase or reduction of taxation.
v. It shall examine and report on all proposals for borrowing by the State Government ; shall raise such loans as have been duly authorized and shall be in charge of all matters relating to the service of loans and the discharge of any financial guarantees.
vi. It shall be responsible for seeing that proper financial rules are framed for the guidance of other departments and that suitable accounts are maintained by other Departments and establishments subordinate to them.
vii. It shall prepare an estimate of the total receipts and disbursements of the State in each year and shall be responsible during the year for watching the state of the State Government’s balances and for their Ways and Means operations.
viii. In connection with the budget and with supplementary estimates—
a. It shall prepare a statement of estimated revenue and expenditure to be laid before the Legislature in each year and any supplementary estimates or demands for excess grants which may be submitted to the vote of the Legislative Assembly or, the case may be, be laid before the Legislature.
b. For the purpose of such preparation it shall obtain from the Departments concerned material on which to base its estimates, and it shall be responsible for the correctness of the estimates framed on the material so supplies.
c. It shall examine and advise on all schemes of new expenditure for which it is proposed to make provision in the estimates, and shall decline to provide in the estimates for any scheme, which has not been so examined.
NOTE.—It will be incumbent upon each department to scrutinize each scheme with which it is concerned and which is to be included in the schedule of new demands, as soon as it is ready during the course of the year and to forward the same with its approval to the Finance Department immediately and not at the fag-end of the prescribed time. The Finance Department shall be at liberty or refuse to accept the scheme if it is not sent to them well in advance the prescribed time.
d. It shall prepare Appropriation Bills to be introduced if the Legislature providing for the appropriation of money out on the Consolidated Fund.
ix. On receipt of a report from an Audit Officer that expenditure is being incurred for
which there is no sufficient sanction, it shall require the Department concerned to obtain sanction or not to incur further expenditure.
x. On receiving a report that a financial rule has been contravened or a financial irregularity has been committed, it shall take steps to enforce the rule or to stop or rectify the irregularity.
xi. * * *
xii. It shall advise departments responsible for the collection of revenue regarding the progress of collection and the methods of collection employed.
13. (1) After the Legislature has passed an Appropriation Bill—
i. the Finance Department shall have the power to sanction any re-appropriation within a grant from one major, minor or subordinate head to another ;
ii. the Minister in charge of a Department shall have power to sanction any re-appropriation within a grant between the heads subordinate to a minor head which does not involve undertaking a recurring liability, provided that a copy of any order sanctioning such a re-appropriation shall be communicated to the Finance Department as soon as it is passed.
(2) The Finance Department shall have power to delegate to the High Commissioner for India, in respect of any grant and subject to any condition which it may specify in this behalf, the power of re-appropriation conferred by clause (1) (i) and to sanction the delegation by a Minister to any officer or class of officers the power of re-appropriation conferred on the Minister by clause (1) (ii).
(3) Copies of all orders sanctioning any re-appropriation, which does not require the sanction of the Finance Department shall be communicated to that department as soon as such orders are passed.
14. The Finance Department shall also be consulted upon all proposals to sanction the relaxation of any financial rule and also before final orders are passed in any case of serious financial irregularity.
15. Where consultation with the Finance Department is necessary under the Rules or under these Instructions, it shall take place before the issue of orders or submission of the case to the Council.*
*Reference is to the Council of Ministers
