Chapter 7

LSR 204
RSR 181


7.1.1 According to Article 112(1) of the Constitution, an annual financial statement (also known as budget), giving the estimated receipts and expenditure of the Central Government in respect of each financial year, is to be laid on the Table of the two Houses before the commencement of that year. The annual financial statement or the budget is presented to the Lok Sabha in two parts, viz., the Railway Budget pertaining to the Railway Finance, and the General Budget which gives an overall picture of the financial position of the Government of India, excluding the Railways.

Material for Finance Minister’s budget speech


7.1.2 In January each year, the Ministry of Finance calls upon departments to furnish suitable material for incorporation in the Finance Minister’s budget speech. Action as follows will be taken in this regard:

(a)  The section in the department entrusted with the task of co-ordinating action in this regard will initiate action well in time in anticipation of the receipt of relevant communication from the Ministry of Finance and ask other sections concerned to make suitable material available by a fixed date.

(b)  The sections will prepare the material and forward it to the co-ordinating section after obtaining the approval of the Joint Secretary concerned.

(c)  The co-ordinating section will:

      (i) consolidate and edit the material so received into an integrated document for the department as a whole;

      (ii) obtain the approval of the Secretary; and

      (iii) transmit the material to the Ministry of Finance.

Budget documents


7.1.3 By convention, usually the last working day of February is fixed for the presentation of budget. The following documents are placed before Parliament along with the budget:

(a)  Demands for Grants by Major Heads in One Volume for all departments;

(b)  Expenditure Budget Volume (inset 1) (Incorporating Explanatory Memorandum and Plan Budget), Expenditure Budget Volume 2 (incorporating Notes on Demands for Grants) and Receipts Budget (incorporating Receipts, Recoveries of Loans, Other Capital Receipts and Debt Position of the Central Government);

(c)  Economic Survey containing an assessment of the main trends in the economy of the current year with a view to presenting the background against which the budgetary and economic policies for the coming year have to be viewed (circulated to members in advance);

(d)  Finance Bill to give effect to the financial proposals of the Government for the coming year;

(e)  Explanatory Memorandum explaining the provisions in the Finance Bill;

LSR 213
RSR 183



(f)  The budget can also be presented to the House in two or more parts and when
       such presentation takes place, each part shall be dealt with as if it were the
       budget; and

LSR 215


(g)  Supplementary, additional, excess and exceptional grant and votes of credit shall be regulated by the same procedure as is applicable in the case of Demands for Grants subject to suitable adaptations.

Budget proposals
LSR 205
RSR 181(2)




7.1.4 While presenting the budget at 11.00 hours on the scheduled day in the Lok Sabha, the Finance Minister makes a speech giving inter alia details of the proposals for the new financial year regarding taxation, borrowings and expenditure. The budget is laid on the Table of the Rajya Sabha soon after the Finance Minister has completed his budget speech in the Lok Sabha. No discussion takes place on the day the budget is presented.

General discussion
LSR 207
RSR 182(2)

7.1.5 In consultation with the Ministry of Finance, the Ministry of Parliamentary Affairs fixes dates for general discussion on the budget. The discussion is confined to the budget as a whole or any question of principle involved therein. The Finance Minister has a right to reply to the general discussion in both the Houses. No vote is, however, taken at this stage.

Demands for Grants Cut Motion

7.1.6 After the general discussion, the Demands for Grants of individual departments are taken up in the Lok Sabha for discussion according to a time table as decided at the meeting of the Business Advisory Committee of the House and voted upon. When a demand is taken up for discussion, any member may seek reduction in the amount of the demand by moving any of the following types of cut motions, a notice of which having been given by him earlier:

LSR 209(a)


(a)  ‘Disapproval of Policy Cut’ by moving “that the amount of the demand be reduced to Re. 1”, thus representing disapproval of the Policy underlying the demand.

LSR 209(b)


(b)  ‘Economy Cut’, by moving “that the amount of the demand be reduced by a specified amount” representing the economy that can be effected.

LSR 209(c)


(c)  ‘Token Cut’, by moving “that the amount of the demand be reduced by Rs. 100” in order to ventilate a specific grievance, which is in the sphere of the responsibility of the Government of India.

PRO 9.1


(d)  Subject to the availability of time and the convenience of the Ministers, the Minister while replying to the discussion on Demands for Grants may also deal with such other points made by members in the course of general discussion on General Budget as had not been replied to by the Minister of Finance in his reply to the general discussion on the General Budget.

Guillotining of demands 
LSR 208(2)
PRO 9.2


7.1.7 The demands that are not passed by the Lok Sabha on the last day fixed for the purpose are “guillotined”. The Presiding Officer calls for vote for the remaining demands one after the other and thus all the demands are voted upon within the allotted time. Ministers concerned with the departments whose Demands for Grants have not been discussed in the Lok Sabha and are to be guillotined should be present in the House at the time of guillotine so that they may answer any points which may be raised by members.

Appropriation Bill
LSR 218
RSR 186


7.1.8 After the voting on the demands has been completed, an Appropriation Bill is introduced in the Lok Sabha seeking  “to authorise payment and appropriation of the sums so voted, as well as those required for meeting the charged expenditure from and out of the Consolidated Fund of India for the services during the financial year.” After the Bill has been passed by the Lok Sabha, it is transmitted to the Rajya Sabha for consideration and return.

Finance Bill
LSR 219


7.1.9 The Finance Bill is then considered and passed by Parliament as a Money Bill.

Annual Reports

7.2.1 Departments are expected to prepare annual reports well in advance of the discussion on their Demands for Grants. The purpose of the annual reports is to enable the members to appreciate the performance of each department.


7.2.2 The section entrusted with the task of co-ordinating action in this regard will:

(a)  initiate action for the preparation of the report in the first week of December of  the year to which the report relates;

(b)  watch the progress through a rigid time schedule;

  ensure that the time limits fixed by the Ministry of Urban Development and Poverty Alleviation (Directorate of Printing) (having regard to the programme of business in Parliament) for the transmission of the report in manuscript form (both in Hindi and English) to the press, checking of proofs and the placing of final print order are scrupulously adhered to, so as not to upset the time schedule according to which the printing presses are required to work;

(d) ensure that what is finally printed represents the latest position by distributing to the sections concerned portions of proofs relating to their respective materials for careful scrutiny and correction and updating before return within the time limits to be fixed for the purpose;

(e) ensure that the stipulated number of copies of the report are made available to the LS/RS Secretariat for circulation to members at least one week before the adjournment of both the Houses for recess during budget session; and

(f)  ensure that the report of the department may be released only after the presentation of the budget, as the reports sometimes give indication of the future plan together with reasons therefore, but in no case, their delivery to the Lok/Rajya Sabha Secretariat be delayed beyond the period stipulated above in para 7.2.2(e).


7.2.3 The type of information that might go into an annual report may be based broadly on the lines indicated in Annex 2 subject to such modifications as may be intimated by the Ministry of Parliamentary Affairs from time to time. It will, of course, be open to the departments concerned to modify the broad model format to meet their special needs.

No. of copies of annual report to be supplied

7.2.4 The number of copies of the  annual report to be sent to the various authorities is as follows:-







*(a) LS Secretariat

470 260 620


*(b) RS Secretariat






*(c) Press Information Bureau






  (d) Ministry of Parliamentary Affairs






  (e)  State Governments (including  Governments of Union territories)







  (f) State/Union territory Legislatures







  (g) Dy. Director Acquisition Section,
       Parliament Library room 
No.FB-059,  Parliament Library Building







* No. of copies may be ascertained from the Lok/Rajya Sabha Secretariat before sending.

      While sending the copies to the Press Information Bureau, they should be informed that the annual reports should not be made public till they are circulated to the Members of Parliament.



7.2.5 In an election year, or otherwise, when instead of a regular General Budget, an interim budget seeking Vote on Account is presented before the two Houses of Parliament, Ministries/Departments may send prescribed number of copies of the Statement containing in brief the activities of the department for the preceding calendar year, to the LS/RS Secretariat immediately after presentation of the interim budget. In such a year, the annual report should contain information regarding the activities of the department from the 1 January of the preceding year till 31 March of the year in which Vote on Account is taken and the prescribed number of copies thereof (as in para 7.2.4) should be sent to various authorities after presentation of General Budget.

Annual reports of societies/organisations

7.2.6 The societies/organisations receiving one time assistance of Rs. 50 lakh or above are required to lay their Annual Reports and Audited Accounts before Parliament. In case of societies receiving one time assistance of Rs. 10 lakh and more but less than Rs. 50 lakh, the departments concerned are required to include in their own annual reports a statement showing the quantum of funds provided to each of these societies and purpose for which the funds were utilized, for the information of the Members of Parliament.

Role of Parliament Unit in regard to budgetary discussions in Parliament

7.3 To assist the Minister in replying to the various discussions that take place in both the Houses following the presentation of budget, the Parliament Unit will see that:

(a) a concise brief on the broad lines to be indicated by the Joint Secretary/Secretary is prepared in advance giving the Minister a synoptic view of the working of the department to enable him to answer the criticism that might be voiced during the discussions;

(b) standing notes on important topics which are prepared by each section are kept up to date for reference at short notice;

(c) the department deputes, by rotation, an officer to be present in the official gallery to take note of the points, relevant to the department, made during the general discussion on budget and consideration of Finance and Appropriation Bills, so that action as required in para 2.9 is taken; and

(d) the concerned branch officers and other higher officers are present in the 
      official gallery when the demands for grants for the departments are discussed.

Cut Motions

7.4 The admissibility of the cut motions is regulated by LSR 210, 211 and 212. On receipt of the notice of these motions, a suitable brief will be prepared on each of the more important of the specific points covered by the cut motions for the use of the Minister, to supplement the general overall brief already referred to in para 7.3 (a).