EPFO APFC 2023 General Studies · Question 112 of 120

Correct — B, (b) 1, 2, 3 and 4. All four items listed in the stem are expenditure charged on the Consolidated Fund of India, and all four are named in Article 112(3) of the Constitution, which sets out the charged list in full. Take them in the order the paper prints them. Statement 1, the debt charges for which the Government of India is liable, is charged, and the constitutional wording is wider than the phrase suggests: it covers interest, sinking fund charges and redemption charges, and other expenditure relating to the raising of loans and the service and redemption of debt. This is by some distance the largest charged item in any Union Budget, since interest payments alone absorb a very large share of revenue receipts. Statement 2, the emoluments and allowances of the President and other expenditure relating to the President's office, is the first item on the constitutional list. Statement 3, the salaries, allowances and pensions payable to or in respect of Judges of the Supreme Court, is charged, and the same clause also charges the pensions payable in respect of Judges of the Federal Court and of High Courts on the Consolidated Fund of India. Statement 4, the salaries and allowances of the Chairman and Deputy Chairman of the Council of States and of the Speaker and Deputy Speaker of the House of the People, is charged as well. So every statement is correct and nothing has to be excluded. The reason these particular items are charged is worth holding on to, because it is what makes the list memorable rather than arbitrary. Charged expenditure is not submitted to the vote of Parliament under Article 113(1), although either House may discuss it. Independence is the principle: the President, the judges of the Supreme Court, the presiding officers of the two Houses and the Comptroller and Auditor-General must not have their remuneration put at the mercy of an annual majority, and debt charges must be met because the credit of the Union depends on their being paid whatever the political weather. The remaining items on the list follow the same logic — the salary, allowances and pension of the Comptroller and Auditor-General, any sums required to satisfy a judgment, decree or award of a court or arbitral tribunal, and any other expenditure declared by the Constitution or by Parliament by law to be so charged. Being unvoted does not mean being outside parliamentary control altogether: charged expenditure is still shown in the annual financial statement and still passes through the Appropriation Act, since Article 114 requires an appropriation made by law before any money may be withdrawn from the Consolidated Fund of India for any purpose.

• (a)1 and 2 only — This option keeps the two items a candidate is most likely to be sure of — debt charges and the President's emoluments — and drops the two that concern office-holders in the judiciary and the legislature. The exclusion cannot be justified. The salaries, allowances and pensions of Judges of the Supreme Court are expressly charged by Article 112(3), and so are the salaries and allowances of the presiding officers of both Houses. The same reasoning that protects the President's emoluments protects theirs: a judge whose salary had to be voted every year by the government of the day would not be independent of it, and neither would a Speaker. There is a real distinction lurking near statement 4 which may be what tempts a candidate to drop it — the salaries of ordinary Members of Parliament and of Ministers are voted, not charged — but the stem names only the Chairman, the Deputy Chairman, the Speaker and the Deputy Speaker, and those four offices are on the charged list.
• (c)2, 3 and 4 only — This option accepts the three items about office-holders and excludes the debt charges, which is exactly backwards: debt charges are not merely charged expenditure, they are the largest single component of it in every Union Budget. Article 112(3) charges the 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 reason is straightforward. If interest on government borrowing had to be voted each year, a hostile or merely inattentive Parliament could put the Union into default, and the price of every future loan would reflect that risk. A candidate who rejects statement 1 has probably assumed that charged expenditure is a short list of salaries for constitutional dignitaries. It is not; it is a list of payments that must not be capable of being refused, and a debt obligation is the clearest case of one.
• (d)3 and 4 only — This option keeps only the judiciary and the presiding officers, discarding both the debt charges and the President's emoluments. The second exclusion is the harder to explain, because the emoluments and allowances of the President and other expenditure relating to that office are the very first item in the charged list in Article 112(3), and the President's salary is the standard textbook illustration of what charged expenditure means. Discarding the debt charges compounds the error, since those are the largest charged item of all. What this option probably reflects is a candidate reading the list as though it named things Parliament would have no interest in voting on, and concluding that the big-ticket financial items must be voted. The test is the opposite one: the question is not whether an item is large or small but whether the Constitution intends that its payment should be beyond the reach of an annual vote.

Article 266(1) establishes the Consolidated Fund of India, into which all revenues received by the Government of India, all loans raised by it and all money received in repayment of loans are credited. It is the principal account of the Union, and Article 114(3) provides that no money may be withdrawn from it except under appropriation made by law. Beside it stand two other funds: the Public Account under Article 266(2), which holds money the government receives as a banker or trustee such as provident fund balances and small savings, and the Contingency Fund under Article 267, placed at the disposal of the President for meeting unforeseen expenditure pending authorisation by Parliament. Expenditure from the Consolidated Fund of India falls into two classes. Charged expenditure, listed in Article 112(3), is not submitted to the vote of Parliament, though either House may discuss it; voted expenditure takes the form of demands for grants which the House of the People may assent to, refuse or reduce, and which the Council of States has no power to vote on at all. Both classes appear in the annual financial statement and both are covered by the Appropriation Act, so the difference lies in whether Parliament may withhold the money, not in whether it sees it. The charged list runs: the President's emoluments and office expenditure; 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; the salaries, allowances and pensions of Supreme Court Judges and the pensions of Federal Court and High Court Judges; the salary, allowances and pension of the Comptroller and Auditor-General; sums required to satisfy a judgment, decree or award of a court or arbitral tribunal; and any other expenditure so declared by the Constitution or by Parliament by law.

Budget and public finance questions run through the polity block of these papers, and the charged-expenditure list is among the most frequently examined items in it because it is finite, closed and printed in one place. An Assistant Provident Fund Commissioner has a professional interest in the distinction as well: the Employees' Provident Fund is not government money in the Consolidated Fund but a trust fund, and understanding what the Consolidated Fund is, what the Public Account holds and how money leaves either of them is part of understanding where a provident fund sits in the architecture of public finance. The item is constructed as a four-statement set with the code option that accepts all four, and that construction has a psychology of its own. A candidate who can verify three statements confidently but is unsure of the fourth is pulled towards an 'only' option, because selecting everything feels incautious. Here the cautious choice is the wrong one. The remedy is to test each statement against the constitutional list rather than against a feeling about how many statements are usually correct, and to remember that Article 112(3) contains seven heads of charged expenditure, of which the stem reproduces four — so a list this long being wholly correct is not surprising at all. Note also what the paper has not asked: it names the presiding officers of the two Houses, not ordinary Members of Parliament, whose salaries are voted.

• Article 112(3) charges on the Consolidated Fund of India: the President's emoluments, allowances and office expenditure; 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; the salaries, allowances and pensions of Supreme Court Judges; the salary, allowances and pension of the Comptroller and Auditor-General; sums to satisfy a judgment, decree or award; and anything else so declared.
• Charged expenditure is not submitted to the vote of Parliament under Article 113(1), although either House may discuss it. Voted expenditure comes before the House of the People as demands for grants, which it may assent to, refuse or reduce; the Council of States has no power to vote on demands for grants at all.
• Both charged and voted expenditure appear in the annual financial statement and both are covered by the Appropriation Act, because Article 114(3) forbids withdrawal of any money from the Consolidated Fund of India except under appropriation made by law. Being unvoted is not the same as being outside parliamentary scrutiny.
• Debt charges are the largest charged item in the Union Budget, and the constitutional wording covers interest, sinking fund charges, redemption charges and other expenditure relating to the raising of loans and the service and redemption of debt. The purpose of charging them is to place the Union's credit beyond the reach of an annual vote.
• The three constitutional funds must be kept apart: the Consolidated Fund of India under Article 266(1), the Public Account of India under Article 266(2) for money held as banker or trustee, and the Contingency Fund of India under Article 267, placed at the disposal of the President to meet unforeseen expenditure pending authorisation by Parliament.

• Assuming that a long list of statements cannot all be correct. Article 112(3) contains seven heads of charged expenditure and the stem reproduces four of them, so the code option accepting everything is the natural answer rather than an incautious one.
• Excluding debt charges on the assumption that charged expenditure means only the salaries of constitutional office-holders. Debt charges are expressly charged and are the largest such item in the Union Budget, precisely so that the Union's credit cannot be put in doubt by a vote.
• Confusing presiding officers with ordinary members. The salaries and allowances of the Chairman, Deputy Chairman, Speaker and Deputy Speaker are charged; the salaries of other Members of Parliament and of Ministers are voted expenditure.
• Believing that charged expenditure escapes the Appropriation Act. It is not voted, but Article 114(3) requires an appropriation made by law before any withdrawal from the Consolidated Fund of India, so charged items pass through the Appropriation Bill along with the granted ones.

Public finance items in these papers cluster around a few closed lists, and the charged-expenditure list is the most examined of them. The forms recur predictably. A statement set like this one asks which of several items are charged, and the answer is often that all of them are, because the list is long enough for a stem to draw four genuine members from it. A negative version asks which item is not charged, and the answer is typically the salary of a Minister, of a Member of Parliament, or of an official whose office is statutory rather than constitutional. A third form tests the consequence rather than the membership: whether charged expenditure can be discussed, whether it can be voted, whether it needs an Appropriation Act. A fourth switches to the States and asks the same questions about Article 202(3). All four are answerable from one page of notes — the seven heads of Article 112(3), the corresponding heads for a State, and the three propositions about discussion, voting and appropriation.

No directly related past PYQ was found.

• practice — not a real PYQ

  Which one of the following is NOT charged on the Consolidated Fund of India?

  • (a)The salary and allowances of the Comptroller and Auditor-General of India
  • (b)The salary and allowances of a Minister of the Union Government
  • (c)The pension payable in respect of a Judge of a High Court
  • (d)Sums required to satisfy a decree of a court

  Answer(b) The salary and allowances of a Minister of the Union Government — ministerial salaries are voted expenditure and come before the House of the People as part of a demand for grants. The other three are expressly charged by Article 112(3): the Comptroller and Auditor-General's salary, allowances and pension, the pensions payable in respect of High Court Judges, and any sums required to satisfy a judgment, decree or award of a court or arbitral tribunal.

• practice — not a real PYQ

  Which one of the following statements about expenditure charged on the Consolidated Fund of India is correct?

  • (a)It can neither be discussed nor voted upon in either House of Parliament
  • (b)It is not submitted to the vote of Parliament, although it may be discussed in either House
  • (c)It may be withdrawn from the Consolidated Fund of India without any appropriation made by law
  • (d)It is met from the Contingency Fund of India rather than from the Consolidated Fund

  Answer(b) It is not submitted to the vote of Parliament, although it may be discussed in either House — that is the rule in Article 113(1). Charged expenditure is still shown in the annual financial statement and still requires an appropriation made by law under Article 114(3), which is why the third option is wrong; and the Contingency Fund under Article 267 exists for unforeseen expenditure pending authorisation, not for the charged list.