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Appropriation Bill

Topics Covered: Government Budgeting.

Appropriation Bill

What to study?

For Prelims and Mains: Features, procedure followed and significance.

Context: The Lok Sabha has passed the Appropriation Bill 2020-21 that empowers the government to draw over ₹110 lakh crore from the Consolidated Fund of India for its working, as well as for the implementation of its programmes and schemes.

  • Now, only the Finance Bill that pertains to the government’s taxation proposal awaiting passage.
  • The Appropriation Bill was passed by a voice vote.
  • Following this, Speaker Om Birla applied “guillotine” — the Parliamentary tool to club all other pending subjects for discussion.

What is Appropriation Bill?

Appropriation Bill is a money bill that allows the government to withdraw funds from the Consolidated Fund of India to meet its expenses during the course of a financial year.

  • As per article 114 of the Constitution, the government can withdraw money from the Consolidated Fund only after receiving approval from Parliament.
  • To put it simply, the Finance Bill contains provisions on financing the expenditure of the government, and Appropriation Bill specifies the quantum and purpose for withdrawing money.

Procedure followed:

  1. The government introduces the Appropriation Bill in the lower house of Parliament after discussions on Budget proposals and Voting on Demand for Grants.
  2. The Appropriation Bill is first passed by the Lok Sabha and then sent to the Rajya Sabha.
  3. The Rajya Sabha has the power to recommend any amendments in this Bill. However, it is the prerogative of the Lok Sabha to either accept or reject the recommendations made by the upper house of Parliament.
  4. The unique feature of the Appropriation Bill is its automatic repeal clause, whereby the Act gets repealed by itself after it meets its statutory purpose.

What happens when the bill is defeated?

Since India subscribes to the Westminster system of parliamentary democracy, the defeat of an Appropriation Bill (and also the Finance Bill) in a parliamentary vote would necessitate resignation of a government or a general election. This has never happened in India till date, though.

Scope of discussion:

  • 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.

 Insta Link:

Prelims Link:

  1. Appropriation vs Finance bills- similarities and differences.
  2. Scope of discussion and amendments to appropriation bill.
  3. Powers of Rajya Sabha wrt to Appropriation Bill vs role of speaker.
  4. Procedure to be followed while passing appropriation bill vs financial bills.
  5. Consolidated vs Contingency funds.
  6. Guillotine- applicability and implications.
  7. Components of annual financial statement.

Mains Link:

Differentiate between appropriation bill and finance bill under Article 110 of the Indian Constitution.

Sources: the Hindu.