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This article is written by Anannya Sinha from Symbiosis Law School, Noida. In this article she talks about the appropriation bill and its various aspects. 

What are Appropriation Bills

A Bill is a proposal for legislation. A bill becomes an act or law when duly enacted. Every Bill has to pass through stages in each House. The bills introduced in the Parliament are of two kinds- private bills and public bills. Although all the Bills are governed by the same procedure in the House, they can differ in various respects.

In the Parliament of India, the draft Bill is sent to individual ministries relating to the matter. From there the Bill goes to the Ministry of Law and Justice (India) and then is passed on to the Cabinet committee which is headed by the Prime Minister.

The Bills introduced in the Indian Parliament are of four types:

  • Money Bill (Article 110 of the Indian Constitution) deals  with financial matters like taxation, public expenditure, etc
  • Financial Bill (Article 117) deals with financial matters (but are different from money bills)
  • Ordinary Bill (Article 107, Article 108) deals with any matter other than financial subjects
  • Constitution Amendment Bill (Article 368) deals with the amendment of the provisions of the Constitution of India.

A proposed law that permits the expenditure of government monies is known as an Appropriation Bill. It is a measure that allocates funds for specified purposes. It’s also known as a spending Bill or a supply Bill. The Appropriation Bill grants the government the authority to take money from the Consolidated Fund of India to cover expenses throughout the fiscal year. The government can only remove money from the Consolidated Fund with Parliament’s consent, according to Article 114 of the Indian Constitution.

As per Article 112 of the Indian Constitution, the Central Government of India is bound to present an Annual Financial Report, which is also known as the Union Budget, to the Parliament. This annual budget can be considered detailed documentation of how the government plans to raise funds in the upcoming fiscal year and where funds may be spent during the same period.

The Union Budget contains financial information for three fiscal years, including actuals from the previous year, forecasts for the current fiscal year, and estimates for the next fiscal year. In addition, the Union Budget contains the Appropriation Bill, which must be enacted by both Houses of Parliament before it can be implemented on April 1st. 

Procedure to be followed to introduce Appropriation Bills

A Bill is a proposed piece of legislation that is introduced in Parliament. After each House of Parliament has debated and approved a Bill, and it has gained the President’s approval, it becomes law and is known as an Act. A Bill can be introduced by any member of Parliament. Unlike Ordinary Bills, Money Bills are only introduced in Lok Sabha on the President’s recommendation. The Bill moved on the recommendation of the President and introduced in the Lok Sabha is termed as a government Bill.

The procedure is as follows: 

  1. After talks on Budget ideas and Voting on Demand for Grants, the administration introduces the Appropriation Bill in the lower house of Parliament.
  2. The Lok Sabha passes the Appropriation Bill before sending it to the Rajya Sabha.
  3. Any modifications to this Bill can be recommended by the Rajya Sabha. The Lok Sabha, on the other hand, has the power to approve or reject the recommendations made by Parliament’s upper body.
  4. The Appropriation Bill is notable for its automatic repeal clause, which ensures that the Act is abolished once it has served its legislative purpose.

The bill becomes an act after the President gives his assent, and it is published in the Indian Statute Book

Amendments to Appropriation Bills

The process of altering or amending a law or document (such as a constitution) by the parliamentary or constitutional procedure is called an amendment. 

No amendment to an Appropriation Bill can be presented that has the effect of changing the amount or destination of any grant granted or the amount of any expenditure charged on the Consolidated Fund of India, and the Lok Sabha Speaker’s decision on whether such an amendment is allowed is final. 

Vote on account

According to the Constitution, the government can only take money from the Consolidated Fund of India if it has been appropriated by legislation. During the budget process, an appropriation Bill is passed for this purpose. The appropriation Bill, on the other hand, may take some time to pass through Parliament and become law. Meanwhile, starting April 1, the government will need approval to spend even a single dime.

A vote on account, as described by Article 116 of the Indian Constitution, is a grant in advance from the Consolidated Fund of India to the federal government to satisfy short-term expenditure demands, usually for a few months until the new financial year begins.

In contrast to a full Budget, which is a detailed financial statement of expenditures and receipts that includes changes in taxes and government policies, a vote on account is only a temporary licence to spend money. Because it is not fair to deny the government the ability to construct its own Budget for the remainder of the year if it changes after elections, the administration prefers to seek a vote on account rather than submitting a full Budget.

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Appropriation vs. Finance vs. Money Bills

Let’s first understand what these two Bills are and what they entail.

A Finance Bill, also known as a Money Bill under Article 110 of the Indian Constitution, is a bill that is tabled in the Parliament each year to give effect to the government’s financial recommendations for the following fiscal year. A Finance Bill is primarily concerned with tax and levy changes. Once a year, during the presentation of the Budget, a Finance Bill is normally introduced. This means if the Finance Minister proposes some changes to income tax slabs during the budget speech, then that proposal will be introduced in the Parliament as a Finance Bill and will have to be passed by both the houses to come into effect.

The Appropriation Bill, also known as a Money Bill or the Finance Bill, permits the government to take money from the Consolidated Fund of India to cover expenses that may arise during a fiscal year. After presenting the Union Budget to Parliament, the government introduces the Appropriation Bill. This is because the Budget includes intentions to spend money on social programmes to help people from all walks of life. The government needs funds to carry out these programmes, which it obtains from the Consolidated Fund of India.

One of the most fundamental differences between the two bills is that the Appropriation Bill deals with the budget’s spending side, whilst the Finance Bill works with the budget’s income (or taxes and levies) side. 

Another significant distinction between the two Bills is that in the Finance Law, the Houses of Parliament can seek adjustments to the amounts listed in the Bill (such as tax reductions or rejections), whereas in the Appropriation Bill, no amendments can be introduced or enacted. 


Before becoming an Act of Parliament, a Bill is only a draught. The Bill must adhere to the criteria outlined above in order to become an act. The Parliament’s role does not end with the passage of laws. It also has a role to play in examining the regulations that create the groundwork for these laws. Both houses of Parliament have a committee that examines the government’s rules produced under various legislation.

These broad committees lack the bandwidth and technical expertise to investigate various laws and regulations enacted by the government. The only thing that can be done is for political parties to reconsider their positions in our legislative system.

The legislative process in the Parliament will have to be rethought. Without these procedures, Parliament will become a rubber stamp for the government’s legislation.


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