The Annual Financial Statement

(c) debt charges for which the Government of India is liable, including interest, sinking fund charges and redemption charges, and other expenditure relating to the raising of loans and the service and redemption of debt;

(d) the salaries, allowances and pensions of Judges of the Supreme Court; the pensions of Judges of the Federal Court; and the pensions of Judges of any High Court exercising jurisdiction in relation to any area included in the territory of India, or which before the commencement of the Constitution exercised jurisdiction in a Governor's Province of the Dominion of India;

(e) the salary, allowances and pension of the Comptroller and Auditor-General of India;

(f) any sums required to satisfy any judgment, decree or award of any court or arbitral tribunal;

and any other expenditure declared by the Constitution or by Parliament by law to be so charged.

Now read the list as a list of purposes and the pattern is unmistakable.

Clause (a) is the head of state. Clause (b) is the presiding officers of the Houses. Clause (d) is the judiciary. Clause (e) is the auditor. Clause (f) is court judgments and awards.

Every one of them is an office or an obligation that must be beyond the reach of an annual vote. A President, a Speaker, a Judge or an auditor whose salary the House of the People could refuse would be dependent on it; and a judgment debt the Government could decline to pay by refusing a grant would not be a judgment at all.

And clause (c) is the exception that proves the rule. Debt charges are charged not because the creditor is independent but because the credit of the Union must not be at the mercy of an annual vote. A Government that could default because the House refused a grant could not borrow.

Say that in an answer and the whole label opens. Chapter 660 read section 13 of the Central Vigilance Commission Act and chapter 130 read section 10(1) of the Lokpal Act, each charging that institution's money on the Fund. Those sections are Parliament using the last words of article 112(3), "any other expenditure declared by Parliament by law to be so charged", to add an institution to the constitutional list of the protected. The device Module II kept meeting is here in its original form.

Article 113: what the House may do with each division

113(1). So much of the estimates as relates to charged expenditure shall not be submitted to the vote of Parliament, but nothing in this clause shall be construed as preventing the discussion in either House of any of those estimates.

113(2). So much as relates to other expenditure shall be submitted as demands for grants to the House of the People, which shall have power to assent, or to refuse to assent, to any demand, or to assent to any demand subject to a reduction of the amount specified therein.

113(3). No demand for a grant shall be made except on the recommendation of the President.

So the two divisions of article 112(2)(a) and (b) have two different constitutional treatments, and chapter 1330 works the votable half.

And note the words of clause (1) once more. "Not submitted to the vote" is not "not discussed". The House may debate the Comptroller and Auditor General's estimates, criticise the judiciary's establishment costs and ask why debt charges have risen; what it may not do is refuse them. That is the exact measure of independence the charged device confers: immunity from the vote, not immunity from scrutiny.

A worked example

The annual financial statement for a year is laid.

Where does the salary of a Judge of the Supreme Court appear? On the charged side: article 112(3)(d)(i).

Where does the Comptroller and Auditor General's salary appear? Charged: article 112(3)(e).

Where does the establishment of a Ministry appear? On the votable side, as a demand for grants under article 113(2).

Where does an arbitral award against the Union appear? Charged: article 112(3)(f), sums required to satisfy any judgment, decree or award of a court or arbitral tribunal.

A member wishes to move a cut on the Comptroller and Auditor General's estimate. He cannot. Article 113(1): charged expenditure is not submitted to the vote.

He wishes instead to criticise the auditor's staffing in the debate. He may. The clause does not prevent discussion.

Parliament wishes to give a new statutory commission the same protection. It may, by law declaring the expenditure charged, which is what section 13 of the Central Vigilance Commission Act and section 10(1) of the Lokpal Act do.

And a member asks why the statement distinguishes revenue account from other expenditure. Article 112(2) requires it, and it is an accounting distinction between recurring and capital expenditure, not the charged and votable one.

What beginners get wrong

That the Constitution provides for a "budget". The expression it uses is the annual financial statement.

That the statement goes only to the House of the People. It is laid before both Houses; only the demands go to the House of the People.

That charged expenditure cannot be discussed. Article 113(1) expressly preserves discussion; what is excluded is the vote.

That the charged list is a miscellany. It is a list of the head of state, the presiding officers, the judiciary, the auditor, judgment debts and the public debt: offices and obligations that must be beyond an annual vote.

That the charged and votable division is the same as the revenue account division. The first decides who may vote; the second is an accounting classification.

Quick revision

Art 112(1): the President shall in respect of every financial year cause to be laid before both Houses a statement of the estimated receipts and expenditure, the annual financial statement.

Art 112(2): show separately the charged sums and the other sums, and distinguish expenditure on revenue account from other expenditure. Two different distinctions.

Art 112(3), the charged list: (a) the President's emoluments; (b) the Chairman, Deputy Chairman, Speaker and Deputy Speaker; (c) debt charges, interest, sinking fund and redemption; (d) salaries, allowances and pensions of Supreme Court Judges, pensions of Federal Court and High Court Judges; (e) the Comptroller and Auditor-General; (f) sums to satisfy a judgment, decree or award; and anything Parliament by law declares charged.

Read it as a list of the protected: head of state, presiding officers, judiciary, auditor, judgment debts, and the credit of the Union. s.13 of the CVC Act and s.10(1) of the Lokpal Act are Parliament adding to that list.

Art 113(1): charged expenditure not submitted to the vote, but discussion is not prevented. 113(2): other expenditure as demands for grants to the House of the People, which may assent, refuse or reduce. 113(3): no demand except on the recommendation of the President.

Test yourself

1. What does article 112 require? That the President shall, in respect of every financial year, cause to be laid before both Houses of Parliament a statement of the estimated receipts and expenditure of the Government of India for that year, which Part XII calls the annual financial statement. The estimates of expenditure must show separately the sums required to meet expenditure charged upon the Consolidated Fund of India and the sums required to meet other expenditure proposed to be made from that Fund, and must distinguish expenditure on revenue account from other expenditure. Clause (3) then enumerates the charged expenditure, ending with any other expenditure declared by the Constitution or by Parliament by law to be so charged.

2. What is charged on the Consolidated Fund, and what does the list have in common? The emoluments and allowances of the President and other expenditure relating to his office; the salaries and allowances of the Chairman and Deputy Chairman of the Council of States and the Speaker and Deputy Speaker of the House of the People; debt charges for which the Government of India is liable, including interest, sinking fund charges and redemption charges and other expenditure relating to the raising of loans and the service and redemption of debt; the salaries, allowances and pensions of Judges of the Supreme Court, the pensions of Judges of the Federal Court and the pensions of Judges of the High Courts described in the clause; the salary, allowances and pension of the Comptroller and Auditor-General of India; and any sums required to satisfy a judgment, decree or award of any court or arbitral tribunal. What the list has in common is that each item is an office or an obligation which must be beyond the reach of an annual vote: the head of state, the presiding officers of the Houses, the judiciary, the auditor, and judgment debts, whose payment a Government must not be able to avoid by declining to seek a grant. Debt charges are charged for a related reason, that the credit of the Union must not depend on an annual vote.

3. What is the effect of being charged? That the estimate relating to it shall not be submitted to the vote of Parliament, under article 113(1); but the same clause expressly provides that nothing in it shall be construed as preventing the discussion in either House of any of those estimates. The protection is therefore immunity from the vote and not immunity from scrutiny: a member may criticise the Comptroller and Auditor General's establishment, or the growth of debt charges, in the debate, and may not move a cut upon them. Votable expenditure, by contrast, goes to the House of the People as demands for grants under article 113(2), which may assent, refuse to assent, or assent subject to a reduction, no demand being made except on the recommendation of the President.

4. How does the charged device connect with the earlier modules of this book? Through the closing words of article 112(3), which make charged any other expenditure declared by Parliament by law to be so charged. Section 13 of the Central Vigilance Commission Act 2003 charges the expenses of that Commission, including the salaries, allowances and pensions of the Commissioners, the Secretary and the staff, upon the Consolidated Fund of India; section 10(1) of the Lokpal and Lokayuktas Act 2013 does the same for the Lokpal; and article 148(6) does it for the office of the Comptroller and Auditor General himself. Each is an exercise of the same technique, the addition of an institution to the constitutional list of those whose money is beyond the annual vote, and each is the strongest single guarantee of independence available in Indian public law short of the removal procedure of a Judge.