Insights into Editorial: General Annual Budget- 2017

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Insights into Editorial: General Annual Budget- 2017

What is Budget?

The Annual Financial Statement or the Statement of the Estimated Receipts and Expenditure of the Government of India in respect of each financial year is popularly known as the Budget.


Presentation of the budget:

The Budget is presented to Lok Sabha on such day as the President may direct. Immediately after the presentation of the Budget, the following three statements under the Fiscal Responsibility and Budget Management Act, 2003 are also laid on the Table of Lok Sabha:

  1. The Medium Term Fiscal Policy Statement.
  2. The Fiscal Policy Strategy Statement.
  3. The Macro Economic Framework Statement.

No discussion on Budget takes place on the day it is presented to the House. Budgets are discussed in two stages—the General Discussion followed by detailed discussion and voting on the demands for grants.


General Discussion on the Budget:

During the General Discussion, the House is at liberty to discuss the Budget as a whole or any question of principles involved therein but no motion can be moved. A general survey of administration is in order. The scope of discussion is confined to an examination of the general scheme and structure of the Budget, whether the items of expenditure ought to be increased or decreased, the policy of taxation as expressed in the Budget and in the speech of the Finance Minister. The Finance Minister has the general right of reply at the end of the discussion.


Consideration of the Demands for Grants by Departmentally Related Standing Committees of Parliament:

With the creation of Departmentally Related Standing Committees of Parliament in 1993, the Demands for Grants of all the Ministries/Departments are required to be considered by these Committees. After the General Discussion on the Budget is over, the House is adjourned for a fixed period. During this period, the Demands for Grants of the Ministries/ Departments are considered by the Committees. These Committees are required to make their reports to the House within specified period without asking for more time and make separate report on the Demands for Grants of each Ministry.


Discussion on Demands for Grants:

The demands for grants are presented to Lok Sabha along with the Annual Financial Statement. These are not generally moved in the House by the Minister concerned. The demands are assumed to have been moved and are proposed from the Chair to save the time of the House. After the reports of the Standing Committees are presented to the House, the House proceeds to the discussion and voting on Demands for Grants, Ministry-wise. The scope of discussion at this stage is confined to a matter which is under the administrative control of the Ministry and to each head of the demand as is put to the vote of the House. It is open to members to disapprove a policy pursued by a particular Ministry or to suggest measure for economy in the administration of that Ministry or to focus attention of the Ministry to specific local grievances. At this stage, cut motions can be moved to reduce any demand for grant but no amendments to a motion seeking to reduce any demand is permissible.


Cut Motions:

The motions to reduce the amounts of demands for grants are called ‘Cut Motions’. The object of a cut motion is to draw the attention of the House to the matter specified therein.


Cut Motions can be classified into three categories:

  • Disapproval of Policy Cut.
  • Economy Cut.
  • Token Cut.


A cut motion to be admissible should satisfy the following conditions:

  • It should relate to one demand only.
  • It should be clearly expressed and should not contain arguments, inferences, ironical expressions, imputations, epithets and defamatory statements.
  • It should be confined to one specific matter which should be stated in precise terms.
  • It should not reflect on the character or conduct of any person whose conduct can only be challenged on a substantive motion.
  • It should not make suggestions for the amendment or repeal of existing laws.
  • It should not relate to a State subject or to matters which are not primarily the concern of the Government of India.
  • It should not relate to expenditure ‘Charged’ on the Consolidated Fund of India.
  • It should not relate to a matter which is under adjudication by a court of law having jurisdiction in any part of India.
  • It should not raise a question of privilege.
  • It should not revive discussion on a matter which has been discussed in the same session and on which decision has been taken.
  • It should not anticipate a matter which has been previously appointed for consideration in the same session.
  • It should not ordinarily seek to raise discussion on a matter pending before any statutory tribunal or statutory authority performing any judicial or quasi-judicial functions or any commission or court of enquiry appointed to enquire into, or investigate any matter. However, the Speaker may in his discretion allow such matter being raised in the House as is concerned with the procedure or stage of enquiry, if the Speaker is satisfied that it is not likely to prejudice the consideration of such matter by the statutory tribunal, statutory authority, commission or court of enquiry.
  • It should not relate to a trifling matter.


The Speaker decides whether a cut motion is or is not admissible and may disallow any cut motion when in his opinion it is an abuse of the right of moving cut motions or is calculated to obstruct or prejudicially affect the procedure of the House or is in contravention of the Rules of Procedure of the House.



On the last of the allotted days for the discussion and voting on demands for grants, at the appointed time the Speaker puts every question necessary to dispose of all the outstanding matters in connection with the demands for grants. This is known as guillotine. The guillotine concludes the discussion on demands for grants.


Vote on Account:

As the whole process of Budget beginning with its presentation and ending with discussion and voting of demands for grants and passing of Appropriation Bill and Finance Bill generally goes beyond the current financial year, a provision has been made in the Constitution empowering the Lok Sabha to make any grant in advance through a vote on account to enable the Government to carry on until the voting of demands for grants and the passing of the Appropriation Bill and Finance Bill.

  • Normally, the vote on account is taken for two months for a sum equivalent to one sixth of the estimated expenditure for the entire year under various demands for grants. During an election year, the vote on account may be taken for a longer period say, 3 to 4 months if it is anticipated that the main demands and the Appropriation Bill will take longer than two months to be passed by the House.
  • As a convention vote on account is treated as a formal matter and passed by Lok Sabha without discussion.
  • Vote on account is passed by Lok Sabha after the general discussion on the Budget is over and before the discussion on demands for grants is taken up.


Appropriation Bill:

After the demands for grants have been passed by the House, a Bill to provide for the appropriation out of the Consolidated Fund of India of all moneys required to meet the grants and the expenditure charged on the Consolidated Fund of India is introduced, considered and passed. The introduction of such Bill cannot be opposed. The scope of discussion is limited to matters of public importance or administrative policy implied in the grants covered by the Bill and which have not already been raised during the discussion on demands for grants.

  • The Speaker may require members desiring to take part in the discussion to give advance intimation of the specific points they intend to raise and may withhold permission for raising such of the points as in his opinion appear to be repetition of the matters discussed on a demand for grant.
  • No amendment can be proposed to an Appropriation Bill 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 India, and the decision of the Speaker as to whether such an amendment is admissible is final. An amendment to an Appropriation Bill for omission of a demand voted by the House is out of order.
  • In other respects, the procedure in respect of an Appropriation Bill is the same as in respect of other Money Bills.


Finance Bill:

“Finance Bill” means a Bill ordinarily introduced every year to give effect to the financial proposals of the Government of India for the next following financial year and includes a Bill to give effect to supplementary financial proposals for any period.

  • The Finance Bill is introduced immediately after the presentation of the Budget. The introduction of the Bill cannot be opposed. The Appropriation Bills and Finance Bills may be introduced without prior circulation of copies to members.
  • The Finance Bill usually contains a declaration under the Provisional Collection of Taxes Act, 1931, by which the declared provisions of the Bill relating to imposition or increase in duties of customs or excise come into force immediately on the expiry of the day on which the Bill is introduced. In view of such provisions and the provision of Act of 1931, the Finance Bill has to be passed by Parliament and assented to by the President before the expiry of the seventy-fifth day after the day on which it was introduced.
  • As the Finance Bill contains taxation proposals, it is considered and passed by the Lok Sabha only after the Demands for Grants have been voted and the total expenditure is known. The scope of discussion on the Finance Bill is vast and members can discuss any action of the Government of India. The whole administration comes under review.
  • The procedure in respect of Finance Bill is the same as in the case of other Money Bills.


Highlights of the Union Budget 2017-18:

The Union Minister for Finance and Corporate Affairs, Shri Arun Jaitley recently presented the General Budget 2017-18 in Parliament.

  • This is the first of its kind which included the Railway Budget. This year’s Union Budget also does not have Plan and Non-plan classifications and has been advanced by a month to the beginning of February.
  • The Finance Minister Shri Jaitley in his Budget speech said that the agenda is “Transform, Energise and Clean India” (TEC)- to transform the quality of governance for better quality of life.
  • The aim is to energise various sections of society, especially the youth and the vulnerable and to clean the country from the evils of corruption, black money and non-transparent political funding.
  • Expenditure in Budget for 2017-18 has been placed at Rs.21.47 lakh crores. The total resources being transferred to the States and the Union Territories with Legislatures is Rs. 4.11 lakh crores, against Rs.3.60 lakh crores in BE 2016-17.
  • For the first time, a consolidated Outcome Budget, covering all Ministries and Departments, is being laid along with the Union Budget.

New announcements:

  • Shri Arun Jaitley announced that the Government will now undertake a Mission Antyodaya to bring one crore households out of poverty and to make 50,000 gram panchayats poverty free by 2019, the year marking the 150th birth anniversary of Gandhiji. The strategy is to utilise the existing resources more effectively along with annual increases and a focused micro plan for sustainable livelihood for every deprived household.
  • Under the reoriented MGNREGA to support our resolve to double farmers’ income, about 10 lakh farm ponds are expected to be completed by March 2017 against the targeted 5 lakh farm ponds. This will contribute greatly to drought proofing of gram panchayats. The budgetary provision of Rs.38,500 crores under MGNREGA in 2016-17 has been increased to Rs. 48,000 crores in 2017-18, the highest ever allocation for MGNREGA.
  • A programme called SANKALP – Skill Acquisition and Knowledge Awareness for Livelihood Promotion programme to provide market relevant training to 3.5 crore youth with a budget of Rs. 4,000 crores has been announced. The next phase of Skill Strengthening for Industrial Value Enhancement (STRIVE) is also be launched in 2017-18 at a cost of Rs.2,200 crores to focus on improving the quality and market relevance of vocational training provided in ITIs and strengthen the apprenticeship programmes through industry cluster approach.
  • A National Testing Agency is proposed to be established as an autonomous and self-sustained premier testing organisation to conduct all entrance examinations for higher education institutions in the country.
  • As a part of strengthening overall health infrastructure in the country the Finance Minister announced setting up of two new All India Institutes of Medical Sciences in the States of Jharkhand and Gujarat.
  • The Finance Minister said by the end of 2017-18, high speed broadband connectivity on optical fibre will be available in more than 1,50,000 gram panchayats, with wifi hot spots and access to digital services at low tariffs. He said accordingly the budget for Bharat Net Project has been stepped up to Rs.10,000 crores in 2017-18.
  • The Minister said that a ‘DigiGaon’ initiative will be launched to provide tele-medicine, education and skills through digital technology.
  • The minister announced that a new and restructured Central scheme, namely, Trade Infrastructure for Export Scheme (TIES) will be launched in 2017-18.
  • The Finance Minister has announced that the government has decided to abolish the Foreign Investment Promotion Board (FIPB) in 2017-18. He said that a roadmap for the same will be announced in the next few months. The minister said that this became possible as The Foreign Investment Promotion Board (FIPB) has successfully implemented e-filing and online processing of FDI applications and more than 90% of the total FDI inflows are now through the automatic route.
  • Shri Arun Jaitley asserted that a bill will be introduced in the Parliament to curtail the menace of illicit deposit schemes, after the draft bill, placed in the public domain, has been finalized. He said this is part of this budget’s and the Government’s ‘Clean India’ agenda. The Minister said that an amendment Bill to change the Arbitration and Conciliation Act 1996 will be introduced to streamline institutional arrangements for resolution of disputes in infrastructure related construction contracts, PPP and public utility contracts.
  • The Minister asserted that the disinvestment policy announced in the last budget will continue and the Government will put in place a revised mechanism and procedure to ensure time bound listing of identified CPSEs on stock exchanges.
  • The minister announced that a Computer Emergency Response Team for Financial Sector (CERT-Fin) will be established and it will work in close coordination with all financial sector regulators and other stakeholders.
  • He announced that the shares of Railway PSEs like IRCTC, IRFC and IRCON will be listed in stock exchanges.
  • The minister said that government also proposes to create an integrated public sector ‘oil major’ which will be able to match the performance of international and domestic private sector oiland gas companies.
  • 10,000 crores for recapitalization of Banks in 2017-18 has been allocated. Additional allocation will be provided, as may be required. The Minister said that Listing and trading of Security Receipts issued by a securitization company or a reconstruction company under the SARFAESI Act will be permitted in SEBI registered stock exchanges. This will enhance capital flows into the securitization industry and will particularly be helpful to deal with bank NPAs.