Constitution of India

Article 204 – Appropriation Bills

  1. 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 moneys 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 or 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(3) Subject to the provisions of articles 205 and 206, no money shall be withdrawn from the Consolidated Fund of the State except under appropriation made by law passed in accordance with the provisions of this article.

The corresponding provision for the procedure in Union Parliament is article 114.

After the grant is sanctioned, an Appropriation Bill is introduced to provide for the appropriation out of the Consolidated Fund of the State of all moneys required to meet the grants thus made by the Assembly. It is true that the Appropriation Acts cannot be said to give a direct legislative sanction to the trade activities themselves. But so long as the trade activities are carried on in pursuance of the policy which the executive Government has formulated with the tacit support of the majority in the Legislature, no objection on the score of their not being sanctioned by specific legislative provision can possibly be raised. Objections could be raised only in regard to the expenditure of public funds for carrying on of the trade or business and to these the Appropriation Acts would afford a complete answer.

The Appropriation Act is the second stage in the authorization of expenditure, the first being the voting of grants by the Assembly. After the Act is passed, the limitation of the expenditure under a head is to be determined by reference to the Schedule of the Act. Again, an expenditure can be incurred by the Government on an object provided that it can be ascribed to any of the heads mentioned in the Schedule. Where it can be so ascribed and the limit of expenditure prescribed in the Schedule has not exceeded, its constitutionality cannot be questioned. In other words, money appropriated towards a particular head in the Schedule is to be spent on that head only and no other unless the Schedule is amended by an appropriate law or such a course is permitted by any rule consistent with the Constitution.

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