The financial power of the Indian Parliament is outlined in the Constitution of India and covers various aspects of financial management, including the approval of the budget, taxation, public expenditure, and financial control.
1. Approval of the Budget:
A. Annual Financial Statement:
- The government presents the Annual Financial Statement, commonly known as the budget, in Parliament.
B. Two Parts:
- The budget is divided into two parts: the Revenue Budget (dealing with revenue receipts and expenditures) and the Capital Budget (dealing with capital receipts and expenditures).
C. Vote on Account:
- In case the budget is not approved before the beginning of the new financial year, Parliament can grant a Vote on Account, allowing the government to withdraw funds to meet its expenses for a specified period.
D. Appropriation Bills:
- Parliament approves the expenditure detailed in the budget through the passage of Appropriation Bills.
E. Expenditure Classification:
- The expenditure is classified into charged and voted expenditures. Charged expenditures are charged on the Consolidated Fund of India and do not require annual approval, while voted expenditures require parliamentary approval.
2. Taxation:
A. Exclusive Power:
- Parliament has the exclusive power to make laws on matters related to taxation. This power is enshrined in the Union List of the Seventh Schedule of the Constitution.
B. Union and Excise Duties:
- Parliament can levy taxes such as income tax, customs duties, and excise duties. The rates and principles of taxation are outlined in Finance Acts.
C. Goods and Services Tax (GST):
- The GST, a comprehensive indirect tax, was introduced in India to replace multiple indirect taxes. The GST Council, comprising representatives from the central and state governments, decides on rates and other related matters.
3. Financial Control:
A. Audit by Comptroller and Auditor General (CAG):
- The Comptroller and Auditor General of India (CAG) audits all receipts and expenditures of the government to ensure financial accountability.
B. Public Accounts Committee (PAC):
- The Public Accounts Committee examines the audit reports and holds the government accountable for its financial performance.
4. Money Bills:
A. Definition:
- Money bills exclusively deal with matters related to taxation, public expenditure, government loans, and the Consolidated Fund of India.
B. Introduction in Lok Sabha:
- Money bills can only be introduced in the Lok Sabha, and the Rajya Sabha has limited powers regarding such bills.
C. Recommendation of the President:
- Before introducing a money bill, the President’s recommendation is required.
D. Role of Rajya Sabha:
- The Rajya Sabha can make recommendations, but the Lok Sabha’s decision prevails. The Rajya Sabha cannot reject a money bill; it can only recommend amendments.
E. Time Limit for Rajya Sabha:
- The Rajya Sabha must return the money bill within 14 days. The Lok Sabha can either accept or reject the recommendations.
F. Presidential Assent:
- After the Lok Sabha approves the money bill, it is sent to the President for assent. The President’s assent is final.
5. Contingency Fund of India:
A. Emergency Fund:
- The Contingency Fund of India is an emergency fund available to the President to meet unforeseen expenditures. Advances from this fund are later regularized by obtaining parliamentary approval.
6. Public Account of India:
A. Non-Budgetary Transactions:
- The Public Account of India is used for transactions that do not form a part of the Consolidated Fund or Contingency Fund. It includes items like Provident Funds, Small Savings, and other specific deposits.
B. Interest:
- Interest earned on investments made from the Public Account is credited to the Public Account.
7. Parliamentary Committees:
A. Committees on Financial Matters:
- Parliamentary committees, such as the Public Accounts Committee (PAC) and the Estimates Committee, play a crucial role in scrutinizing budgetary allocations and ensuring financial accountability.
8. Emergency Powers:
A. Financial Emergency:
- During a proclamation of a financial emergency, the President can give directions to states regarding financial matters.
Conclusion:
The financial power of the Indian Parliament is comprehensive, involving the approval and scrutiny of budgets, taxation, control over public expenditures, and oversight through parliamentary committees. These mechanisms ensure transparency, accountability, and responsible financial management in the government’s functioning. The constitutional provisions and established practices contribute to maintaining a balanced and efficient financial system in India.
