What is Article 112 of Indian Constitution – Defination & Meaning

Article 112: Annual financial statement (1) The President shall in respect of every financial year cause to be laid before both the Houses of Parliament a
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Article Number

112

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Part V – The Union

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Article 112: Annual financial statement

  • (1) The President shall in respect of every financial year cause to be laid before both the Houses of Parliament a statement of the estimated receipts and expenditure of the Government of India for that year, in this Part referred to as the “annual financial statement”.
  • (2) The estimates of expenditure embodied in the annual financial statement shall show separately—
    • (a) the sums required to meet expenditure described by this Constitution as expenditure charged upon the Consolidated Fund of India; and
    • (b) the sums required to meet other expenditure proposed to be made from the Consolidated Fund of India,
  • and shall distinguish expenditure on revenue account from other expenditure.
  • (3) The following expenditure shall be expenditure charged on the Consolidated Fund of India—
    • (a) the emoluments and allowances of the President and other expenditure relating to his office;
    • (b) the salaries and allowances of the Chairman and the Deputy Chairman of the Council of States and the Speaker and the Deputy Speaker of the House of the People;
    • (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) (i) the salaries, allowances and pensions payable to or in respect of Judges of the Supreme Court;
    • (ii) the pensions payable to or in respect of Judges of the Federal Court;
    • (iii) the pensions payable to or in respect of Judges of any High Court which exercises jurisdiction in relation to any area included in the territory of India or which at any time before the commencement of this Constitution exercised jurisdiction in relation to any area included in a Governor’s Province of the Dominion of India;
    • (e) the salary, allowances and pension payable to or in respect of the Comptroller and AuditorGeneral of India;
    • (f) any sums required to satisfy any judgment, decree or award of any court or arbitral tribunal;
    • (g) any other expenditure declared by this Constitution or by Parliament by law to be so charged.
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Full Definition & Explanation

Article 112 of the Indian Constitution lays down the procedure for the annual financial statement. This statement is prepared by the President and presented before both Houses of Parliament. It outlines the estimated receipts and expenditure for the financial year. The annual financial statement reflects the government’s financial planning and budgetary allocations. It affects every citizen because it shows how public funds will be used. The statement helps ensure transparency and accountability in government finances. The article specifies that the expenditure estimates must distinguish between two types of expenditures. The first type includes those charges against the Consolidated Fund of India, which are mandatory expenditures such as salaries of key officials and debt servicing. The second type includes discretionary expenditures, which can be allocated for various government programs and services. This distinction is key for understanding how taxpayers’ money is spent. Additionally, Article 112 mandates the presentation of this financial statement annually, ensuring that the Parliament has the necessary information to debate and approve the budget. This process promotes democratic governance, as Parliament represents the people’s interests. The detailed nature of the statement encourages scrutiny, allowing lawmakers to hold the government accountable for its financial decisions. All of this highlights the importance of proper financial management in a democratic setup, ensuring that public resources are utilized effectively and efficiently.

Historical Context

This statement is prepared by the President and presented before both Houses of Parliament. It outlines the estimated receipts and expenditure for the financial year. The annual financial statement reflects the government’s financial planning and budgetary allocations. It affects every citizen because it shows how public funds will be used. Article 112 of the Indian Constitution lays down the procedure for the annual financial statement. The statement helps ensure transparency and accountability in government finances. The article specifies that the expenditure estimates must distinguish between two types of expenditures. The first type includes those charges against the Consolidated Fund of India, which are mandatory expenditures such as salaries of key officials and debt servicing.

Key Features

– The President presents the annual financial statement to Parliament.
– It includes estimated government receipts and expenditure for the year.
– Expenditure is divided into charged and other expenditures.
– Chaired expenditures include salaries of key government officials.
– It ensures transparency and accountability in government finances.

Importance & Impact

– It provides a clear overview of government revenue and expenses.
– Parliament uses the statement to discuss and approve the budget.
– The article fosters transparency in the financial dealings of the government.
– It distinguishes between mandatory and discretionary government expenditures
– Citizens can understand how their taxes are being utilized

Sample UPSC Question

Consider the following statements regarding Article 112 of the Indian Constitution: A. It mandates the President to present an annual financial statement. B. This statement includes only the revenue receipts of the government. C. The financial statement must distinguish between charged and discretionary expenditures. D. It is presented only once in a financial year. Which of the above statements are correct? 1) A and C only 2) A and D only 3) B and C only 4) A, C, and D only
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3

Answer

Answer: b) 1, 3 and 4 only Statement 1 is correct per Article 112(1). Statement 2 is wrong — expenditure charged on the Consolidated Fund under Article 112(3) is not subject to vote; it cannot be refused by Parliament. Statement 3 is correct — Supreme Court judges’ salaries are listed as charged expenditure. Statement 4 is correct — the Budget covers both revenue and capital accounts.

Key Takeaways

✓ The President presents the financial statement to Parliament annually.
✓ It distinguishes between charged and discretionary expenditures
✓ This article fosters financial transparency in governance
✓ Citizens can hold the government accountable for spending.
✓ It is a key tool for parliamentary budget discussions.

FAQs

Article 112 of the Indian Constitution lays down the procedure for the annual financial statement. This statement is prepared by the President and presented before both Houses of Parliament. It outlines the estimated receipts and expenditure for the financial year. The annual financial statement reflects the government’s financial planning and budgetary allocations.

The first type includes those charges against the Consolidated Fund of India, which are mandatory expenditures such as salaries of key officials and debt servicing. The second type includes discretionary expenditures, which can be allocated for various government programs and services. This distinction is key for understanding how taxpayers’ money is spent.

This process promotes democratic governance, as Parliament represents the people’s interests. The detailed nature of the statement encourages scrutiny, allowing lawmakers to hold the government accountable for its financial decisions. All of this highlights the importance of proper financial management in a democratic setup, ensuring that public resources are utilized effectively and efficiently.

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