Budget Glossary #4: What Is The Appropriation Bill?

The Appropriation Bill is one of the two legislation, along with the Finance Bill, that the Government of India needs approved through Parliament as a part of the budgetary process. While the Finance Bill is the legislative framework outlining the government's earning estimates that enables the government to raise funds through taxes, the Appropriation Bill consists of the government's expenditure outline. It's passage in Parliament gives permission to the government to withdraw funds from the Consolidated Fund of India and spend, which the government must do under Article 112 of the Constitution.

The expenditure of the government is presented in the form of 'demand for grants', which is put before the Lok Sabha with respect to each union ministry or department. A separate demand is also put for each union territory. The budget for financial year 2019 - 2020 saw 100 different demands being put forth before the Parliament. Each demand typically includes the total provision required to the ministry or to the department, encompassing both revenue and capital expenditure, grants to states and union territories and advances to various services, which is to be charged to the Consolidated Fund of India.

In a regular budget (which is a budget in a non-election year), the Budget Session of Parliament has two parts; both being separated by a short recess of two to three weeks. After the Finance Minister presents the Budget in the Lok Sabha in the first part, it is debated upon in Parliament, along with a Parliamentary Standing Committee during the recess. After Parliament reconvenes, each demand for grants is debated and voted on individually. Demands not having an opportunity to be voted on individually may be clubbed together and voted in a singular instance.

After voting on the demand for grants, the approved demands are then synchronised in a legislative document, which is the Appropriation Bill, and is then passed through Parliament, and thus lets the government spend from Consolidated Fund of India for the next financial year.