CDS (II) 2023 General Knowledge · Question 22 of 120

Correct — B, Vote on Account. The Constitution deals with this in Article 116, which lets the Lok Sabha make a grant in advance for a part of the financial year while the ordinary procedure of voting the demands and passing the Appropriation Act is still going on. That advance grant is the vote on account. It exists because of a timing problem: the financial year starts on 1 April, but the demands for grants have to be discussed and voted department by department, and the Appropriation Bill passed, before a single rupee can lawfully leave the Consolidated Fund. Without an interim authorisation salaries and running costs would stop. A vote on account therefore covers only ordinary, continuing expenditure, is granted for a limited period, and carries no discussion of policy — it is a bridge, not a budget. Once the full Appropriation Act is passed, the amount already drawn under the vote on account is adjusted against it.

• (a)Vote of Credit — A different clause of the same Article. A vote of credit is for an unexpected demand on the resources of India so large or so indefinite that it cannot be stated with the detail a budget normally carries — an emergency such as a war. It is not the routine start-of-year advance the stem describes.
• (c)Appropriation Bill — This is the full authorisation, not the advance against it. The Appropriation Bill is what legalises withdrawal from the Consolidated Fund for all the grants the House has voted, and it is precisely because it takes time to pass that a vote on account is needed first.
• (d)Advance Account — Not a term of Indian parliamentary finance at all. It is put in to catch a candidate reasoning from the word 'advance' in the stem rather than from the vocabulary of Article 116.

Article 116 gives the House of the People three extraordinary financial powers: a grant in advance for part of a year while the normal procedure is completed, which is the vote on account; a grant to meet an unexpected demand whose magnitude or indefinite character makes ordinary detail impossible, which is the vote of credit; and an exceptional grant forming no part of the current service of any financial year. All three are then given legal effect by an Appropriation Act, because Article 266(3) allows no money to leave the Consolidated Fund of India except under appropriation made by law.

The four options are three real instruments and one invented one, so the item rewards knowing the vocabulary rather than reasoning. Two words in the stem settle it — 'advance' and 'in the beginning of the new financial year'. Routine timing points to the vote on account; an emergency of unknown size would point to the vote of credit; and the Appropriation Bill is the destination rather than the bridge. Note the present position, which has shifted since these instruments were designed. The Union Budget was moved forward to 1 February in 2017 and the whole appropriation is now normally completed before 31 March, so a vote on account is no longer the annual routine it once was. It reappears chiefly in a general election year, when an outgoing government presents an interim budget and seeks a vote on account for the opening months, leaving the full budget to the House that follows.

• A vote on account is an advance grant under Article 116 to meet expenditure while the demands for grants and the Appropriation Bill are still being taken up.
• It covers ordinary, continuing expenditure only, and it is not an occasion for a debate on policy.
• A vote of credit meets an unexpected demand whose amount cannot be stated with the usual detail; an exceptional grant is one forming no part of the current service of any year.
• Article 266(3) bars any withdrawal from the Consolidated Fund of India except under an appropriation made by law.
• The Appropriation Bill is a Money Bill, so it is passed by the Lok Sabha and the Rajya Sabha may only recommend changes, within fourteen days.

• Confusing the vote on account with the vote of credit; the first is for routine timing, the second for an emergency.
• Treating the Appropriation Bill as the interim measure when it is the full authorisation the interim measure anticipates.
• Assuming a vote on account allows a fresh policy debate. It is granted for continuing expenditure, without discussion of policy.

As a definition to name, as a distinction between the vote on account and the vote of credit, or inside a Budget-procedure statements item.

• practice — not a real PYQ

  A grant made by the Lok Sabha to meet an unexpected demand upon the resources of India, when the magnitude or the indefinite character of the service makes it impossible to state the demand with the detail ordinarily given in a budget, is called

  • (a)vote on account
  • (b)vote of credit
  • (c)exceptional grant
  • (d)supplementary grant

  Answer(b) vote of credit — the second of the three special powers in Article 116, used for emergencies such as a war rather than for the routine start of a financial year.

• practice — not a real PYQ

  No money can be withdrawn from the Consolidated Fund of India except under appropriation made by law. This is laid down in

  • (a)Article 110
  • (b)Article 112
  • (c)Article 266(3)
  • (d)Article 280

  Answer(c) Article 266(3) — which is why an Appropriation Act, or an interim authorisation such as a vote on account, must precede any actual spending.